Prepare Now to Escape Obama's Retirement Trap
The loss of triple-A status for Treasury bonds is the most likely trigger. And according to Steven Hess, Moody’s lead analyst for the U.S., it’s not that far-fetched. He states, “The AAA rating of the U.S. is not guaranteed. So if they don’t get the deficit down in the next 3 to 4 years to a sustainable level, then the rating will be in jeopardy.”
- Terrorist Attack or Military Disaster
A terrorist attack or a military disaster like the collapse of Pakistan or an Israel/Iran conflict and disruption of oil shipments could close American markets just as we saw in 2001. That would create a financial crisis over night.
- Another Economic Meltdown
After years of deficits, the greatest hazard to our economy is a run on the dollar and on Treasury securities by foreign investors. Although America’s foreign creditors don’t want to start a run on Treasury debt – they prefer a slow, orderly retreat -- no one intends to be the last to head for the exit. Political or economic pressure in Asia could force Japan or China to take immediate action and dump our debt and knock the prices down to fire-sale levels.
What happens if China decides to cut its losses on U.S. Treasuries and issues a $100 billion sell order? That’s only 10% of their holdings, but it could set off panic selling of dollar-denominated bonds and crush the U.S. stock market like an egg shell. Mortgage rates would spike, which would suck the housing market into another air pocket. The President would probably sign an Executive Order closing the markets until order could be restored.
Any of those events would take place in an atmosphere of deep public worry and fear. That’s when Washington would come to your rescue and guarantee to restore your retirement funds back to a “pre-crash” level. How nice, right? However, in exchange you would need to “voluntarily” move your retirement assets into your new Guaranteed Retirement Account.
For those who don’t sign up for a GRA because they’re not fooled by the carrot, there would be sticks to consider.
1. Additional withdrawal penalties and taxes on their retirement plan.
2. Limitations on permissible investments -- nothing that isn’t “in the public interest.”
3. Mandatory minimum holdings for targeted investments, such as Treasury obligations.
Remember, these retirement proposals are just in the discussion stage but progressives are promoting this confiscation agenda to the Obama Administration as a new source of revenue for a bankrupt federal government desperate for additional sources of revenue.
When the next economic or stock market crisis hits, your retirement assets will be at risk from this type confiscation effort regardless of whether the Democrats or Republicans are in control.
The Confiscation Event
At some time during the next decade, a global run on treasury debt and the dollar will also likely take the American stock market down past lows not seen since the financial meltdown crisis in 2008 and 2009. The 50% to 75% stock market pullback during the actual bankruptcy of the Washington debt and paper dollar will send shock waves through retirees and current plan participants as their private retirement plan balances plummet.
At this time, Washington will come to the rescue and guarantee all private retirement plan market values back to pre-crisis levels. The gullible American public will overwhelmingly support this effort by switching their dwindling funds into the Guaranteed Retirement Annuity managed by the government. For the first few years, Washington will probably label those few of us who warn that that Americans have lost their retirement benefits as extremists, Ron Paul paranoids and Tea Party advocates.
Then it will become crystal clear to all Americans that their retirement benefits have been given away for a promise by an evil group of plunderers who have never in their history kept a promise, a guarantee or their word on anything. The greatest theft of wealth in the history of the world will have taken place and only those few who heeded an early warning will still have their retirement benefits and security.
Ron Holland has written three books, two on the Washington threat to the private retirement system, plus over 100 reports and articles and he speaks and serves as a moderator at conferences on a wide variety of financial, political and freedom-related topics. He is a strong proponent of defending American liberties at home and the importance for global investment diversification outside the dollar and U.S. financial markets. Ron Holland works in Zurich and is a co-editor of the Swiss Mountain Vision Newsletter.
