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The time to start thinking about a premature liquidation is when a new President is elected on a radical platform, probably with a shift in Presidential political parties, and with both houses of the new Congress belonging to his party.
Wow, pretty good call Gary!
The demagoguery of IRAs has begun in the person of Teresa Ghilarducci, a wacked out professor who recommended to Congress that retirement accounts should be confiscated and replaced with Treasury bonds, "to spread the wealth" (she actually said that). This kind of behavior is not at all uncommon among governments. The government of Argentina has stolen its people's money at least twice, most recently when it confiscated all pension funds, to protect their value of course.
Any president coming into office in the midst of this economic chaos is certain to look at all possible ways to raise money, and higher taxes are a certainty. But the Obama administration has foreshadowed a particular willingness to squeeze the cash out of the people. For instance, they will probably attempt to pass a global warming tax, a debate I'll particularly enjoy since global warming is such a grand hoax. I think confiscating retirement accounts and freezing bank accounts are very likely too, so be prepared. It's going to get even weirder.
I feel sorry for my friends at Intuit who will probably have little choice but to watch the government take their 401K money. To get their money out of harm's way they would have to quit their job, rollover the plan into an IRA, and then liquidate. At this point, there's probably no time left for all that, even if they wanted to do it. The government may also attempt to make a confiscation law retroactive to the first of the year, a trick Bill Clinton successfully used when he raised taxes in 1993.
These are times to be very wary of one's money, people. Don't be afraid to make bold moves. The politicians certainly aren't.
3 comments:
What have you read is a good strategy to protect against this? Is there any ideas? I was thinking the least you should do is maybe make a self directed IRA and maybe by GLD leaps and cover them. That's fairly liquid and if we have hyperinflation your covered.
Whoa! Sorry takes12, I didn't mean not to answer until now...strange that my email didn't notify me...
Well I decided to liquidate my IRA, part last year, the rest this year. Lots of taxes...ouch. I also insisted on receiving in-hand the stock certificate for my biggest position. That way, if they monkey with online accounts--or if my brokerage were to fail this year--I'll have something tangible to claim my ownership.
As far as buying LEAPS on GLD, beware. This exchange-traded fund gives you access to the gold price, but you don't own the physical metal. If you read its prospectus carefully you will see that it doesn't allow for independent audits, so there's no way to verify that they hold enough gold to back all the claims against them.
But if you're interested in options, like LEAPS, owning the physical metal isn't exactly your interest anyway, right? Sounds like you're a pretty sophisticated investor and not running with the herd. Good job!
I need to say one more thing about gold. The gold market is tiny. If you add up all assets of the gold industry--the ore, the land, the tractors--everything, you get a value that is about as big as the market capitalization of ONE large corporation, somewhere between $300-500 billion.
Such a tiny market can easily be manipulated, and always has been, even now. If you don't believe the current gold price is managed then explain why gold has not kept even with inflation. Based on the rate of inflation one ounce should be over $2,000, but it's no where near this, right?
A better thing to do in these times than invest in gold is to invest in useful things of tangible value, things that will give you a service or skill to offer, things that will give you a measure of independence, things that will make you a valuable neighbor.
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