Monday, January 10, 2011

Another Fine Mess You've Gotten Us Into, Oligarchs

Got a 401-k retirement account that's making little or even negative returns, and were burned once or twice when equities crashed, say in 2001 and 2006? The good news is you can cash out without the (I believe 10%) penalty if you are at least 59 1/2 years old. The bad news is they withhold about 1/3 up front, so if you think you have $45,000, you'll end up with about $30,000. You can probably do a little better in a IRA, but you still must pay when you cash out.

Those things were a sucker trap that paid off for the banks at least three times, and more if you got back into equities after the 2000 crash, and again in the coming one. The final desert will be "cramdown" to force all or part of private pensions into govt. bonds.

Paul Craig Roberts on Counterpunch

"The fallback target will be private pensions, assuming any survive plunder by the Wall Street investment banks. Pension funds could be required to invest in Treasury debt or they could face a levy. In the Clinton administration, Assistant Secretary of the Treasury Alicia Munnell proposed confiscating 15 per cent of all pension assets on the grounds that they had accumulated tax free. Certainly Washington will steal Americans’ pensions, just as Washington has stolen Americans’ civil liberties, in order to continue the empire’s wars of hegemony."

four steps to getting blood from a stone -

1. lower interest rates to zero so savings pay less than inflation, creating minor inflation, so that
2. everyone gets into equities again, then "take profits", so that
3. everyone has to keep working after retirement because their pensions are gone, and then "cramdown" remaining pensions to finance government debt until only the rich have any cash, then
4. buy up all assets for pennies on the dollar after deflationary crash.

See, you CAN cheat an honest man, but you need to have help from the government.

No comments: