As the United States continues to finance military operations abroad and national bankruptcy at home, the government is on a search for a solution to financing of the trillions in national debt currently held by foreign investors. Economists know that the dollar days, as the world reserve currency, are numbered, as well as, our ability to finance the national debt.
Historically hyperinflation has always been the solution to unsustainable debt, but there always can be an intermediate step to buy more time for the people in power. The largest source of wealth that can be used for that purpose is the trillions of dollars in private retirement funds.
Business Week, Bloomberg, and CNBC all recently alluded to the possible nationalization of trillions in private US retirement plan assets and their forced investment into treasuries. Mandatory IRAs proposed by Obama Administration last month could be the first step in stealth nationalization of our retirement benefits to support the treasury debt market. It is only a proposal at this time, but keep in mind, the government is in desperate need for revenue to monetize their debt obligations.
As it is seen now, the nationalization will begin with a proposal to increase retirement security by creating an additional level of mandatory retirement benefits and forcing all working Americans to contribute 5% of their annual income into a new “guaranteed” account. A different proposal will delay retirement age. It could also be the end of tax deductions and tax-deferred growth of all plans. Existing retirement funds will also be forced into the government programs and you will lose the ability to invest funds outside of the dollar and the US investment markets.
At some time in the future the American stock market will likely to fall down again. At this time, the government will “come to the rescue” and offer switching dwindling funds into the Guaranteed Retirement Annuity. For those who don’t sign up, there would be “incentives” to consider:
Additional withdrawal penalties and taxes on their retirement plan.
Limitations on investments choices.
Mandatory minimum holdings for certain investments.
A ban on offshore investments that could protect your money during hyperinflation.
The majority of people will never wake up to the threat on their retirement benefits, but this will work to the advantage of those ready to protect their benefits. Consider reducing your contributions to the minimum necessary to receive the maximum employer matching contributions or even taking a distribution while you still have the opportunity - penalties and taxes will never be reduced, only increased. Think about offshore diversification and global investment strategies to protect your personal and retirement funds. This certainly doesn’t guarantee you profits or success, but it does reduce the likelihood of loosing control of your retirement funds.
I have heard rumblings of monetizing IRA and 401K accounts and about the government administering these plans. Seems like another failed social security system in the making. Any thoughts on how to fund your retirement by investing overseas without the government being able to touch it?
As the United States continues to finance military operations abroad and national bankruptcy at home, the government is on a search for a solution to financing of the trillions in national debt currently held by foreign investors. Economists know that the dollar days, as the world reserve currency, are numbered, as well as, our ability to finance the national debt.
