Posts Tagged ‘investment’
In his latest letter, Kings of the Wild Frontier, crushes the optimism of all those, roughly 4 altogether in the entire world whose combined IQ barely breaks into triple digit territory, who believe that the debt ceiling “compromise” does anything at all for US spending patterns, weather it is for total marketable debt, or the $66 trillion in NPV of future liabilities. Gross, however, does show us the 5 ways (well, 4 plus default) that the “debt man walking”, aka Uncle Sam and his tens of trillions of future liabilities, plans to rob from you: dear taxpayer, in order to minimize the present value of these unmanageable future liabilities. To wit:
1. Balance the budget and/or grow out of it
2. Unexpected inflation
3. Currency depreciation
4. Financial repression via low/negative real interest rates
All of these guarantee that investor pocketbooks will be dramatically affected… Adversely. Let’s dig in…
Read more at ZeroHedge.com
Americans’ savings and retirement funds are being destroyed, and they are being systematically impoverished by depreciating or debased nominal dollars.
Nominal dollars are the everyday paper dollars that we think of and call money. These dollars change every day (depreciate). The value of these dollars goes down constantly as the money printers continue to debase our currency.
The point is that Americans don’t know the difference. They don’t know that their savings and their retirement are being destroyed, and they are being systematically impoverished by depreciating or debased nominal dollars. If this is not all important, I don’t know what is.
Nominal dollars, or depreciating currency, are destroying America. America is a giant Ponzi scheme, no different from Enron. As with Enron, we are locked into an economic death spiral. The U.S. national debt will never be paid off.
Read more by Bob Livingston at personalliberty.com
President Obama’s budget, to be released next week, will limit how much wealthy individuals – like Mitt Romney – can keep in IRAs and other retirement accounts.
Under the plan, a taxpayer’s tax-preferred retirement account, like an IRA, could not finance more than $205,000 per year of retirement – or right around $3 million this year.
Read more by Karl Denninger at market-ticker.org
I’ve laid this out before but it’s time to do it again, because it’s coming folks.
The recent ditty on how “nobody needs more than $3m for retirement”, defined as “whatever you need to get a $200,000 annuity”, is just one facet of how this will play out.
Since I started writing The Ticker I have been repeatedly asked where one should put their assets to evade confiscation, whether through outright acts of theft, devaluation or any other means.
Read more by Karl Denninger at market-ticker.org
–SNIP– You probably thought the Dodd-Frank Act was all about reining in greedy big banks and Wall Street predators.
Well then, what is the Consumer Financial Protection Bureau it established doing planning to “help” people manage the $19.4 trillion they’ve managed to save for their retirement?
CFPB director and longtime Democratic politician Richard Cordray earlier this month told Bloomberg News that managing retirement savings is “one of the things we’ve been exploring … in terms of whether and what authority we have.”
Every such new creature legislated into existence by our elected officials wastes little time before seeking to expand its power — always with the best intentions, of course.
There always ends up being an excuse to do things the law doesn’t give you any authority for, and the CFPB’s Office for Older Americans being headed by another big government Democrat, Hubert H. Humphrey III, is further cause for worry.
What business, exactly, does a U.S. government that has rung up over $16.6 trillion in red ink have giving consumers advice on how to save money?
Read more at IBD
Savers are most important because without savings, there are no entrepreneurs. This can’t be stressed enough. Amid downturns the last thing a wise central banker would ever do is distort the cost of credit to levels lower than what the market would otherwise bear. Bernanke’s actions tell savers that they won’t be compensated for restoring the capital base, and as a result they’ll continue to hide.
Interest rates must be allowed to reach their natural level free of Fed distortion. If that means they rise, that’s a positive signal; one telling savers that they’ll be properly compensated for taking on more risk. Just as rent controls on apartments lead to scarcity of same, so do price controls on interest rates lead to credit scarcity no matter headline rates of interest.
If you love borrowers and borrowing, you must similarly love savers and saving. The Fed acts as though savers don’t matter, and the result is tight credit for everyone not a massive business or the federal government.
Read more by John Tamny at RealClearMarkets.com