Danger for Retirement Funds
Friday, August 20th, 2010Author Steve Foste
Dangers For Retirement Funds.
What to do?
What would you do? I throw this out to The Texas Ring, a thinking group of common sense people.
Recently Linda has been writing great articles for The Mesh Group at http://www.themeshreport.com/
If you haven’t visited there you are missing out on a lot of great information. It’s funny how different people will make you see things in a different light. I never was a great fan of technical analysis I was always a fundamental person. I am beginning to expand my horizons once again, it is a thinking process.
If I have this right, Linda has shown me that Technical Analysis gives insight into what the market and people are thinking, how they are reacting and can possibly predict how they may react in the future. It is not an exact science and technicians’ have been working on it for years, but it has lead me to take a different view, and the possibly all important view of, what are the people thinking, what will they do next, it is a day to day process of accumulated information over time. It is the sense that the great traders see and feel by reading the charts. It is such a shame that Jesse Livermore one of the greatest traders of all time committed suicide but so did Hemingway, why they lost all hope we will never know. This stuff will drive you nuts.
Stocks for the long haul in our current time does not seem to be a viable solution anymore, and for the last 20 plus years or longer the American people have been hoodwinked into investing in pension funds and 401(k) plans as well as other structured plans to build wealth and prepare for retirement. Unfortunately we have been dealt a bill of goods. What we have thought was true and secure has been a scam, and if not a scam, totally misdirected and destroyed by the very entities who set this up-, the government, the big banks and the investment community. The government may have seen iit as a way to help people prepare for retirement and reduce the impact on social security, but more likely they(politicians) were purchased by the financial establishment to allow for a vehicle to transfer the wealth and savings of the nation into their control(finance industry).
I continually hear this statement from fellow employee’s, It will come back (our 401(k) value), for some reason they do not understand that yes, it may come back but when? It is one month shy now of being 3 years since the market bubble burst. 3 years and we have all continued to put money into these plans, 3 years and most have only regained 60 percent of what they lost many will say 70 to 80 percent, but they mentally don’t adjust for the 3 years of added contributions, the real money they are shelling out to these funds. If it takes 5 years to get back to even you can never recoup those losses, we sheeple continue to follow a flawed and dangerous investing model.
Here’s the headline on the home page of the company that provides my 401(k) services “Record Year in 2009”, they tout what a great job they did, hogwash, they had nothing to do with it. Here is what the headline should read,” We saved your ass in 2008 and grew your account in 2009 to record levels” and the teaser line should be, “we took your accounts to cash during the wipe out and reinvested on the rebound while everyone else wiped out their clients’ accounts. But no, it doesn’t read like that, These companies should have been sending out warning notices daily for people to move to cash and possibly bonds and explaining why. They should have been on the phone to plan administrator sounding warning and developing defensive plans for their clients, where were they? What may I ask are we paying them for. It most definitely isn’t for clear thinking advise and management.
Why are these funds dangerous. Can you think of Bernie Madoff, Enron, GM, World Com Pera,all the government pension funds, unions and politicians! They are dangerous from the standpoint that equities are at risk of economic and currency collapse, bonds are bubble up like a bubble bath, and cash is at risk of inflation destruction. Secondly, your money is at risk of being confiscated by the government with the offer of a new form of social security. Maybe some of you have been planning at retirement to withdraw some of your money in a lump sum and pay off the mortgage or debt and pay the taxes, if the government steals it you won’t have that option.
I do not know that the country will collapse,I do not know that anything I have written is absolutely true, but what we do know, that the government is broke, that pension plans are broke, that medicare and social security don’t have a pot to p… in. We know that the standard of living is deteriorating and cannot be sustained as long as we have a tax borrow and spend government. We know that good jobs are becoming scarcer everyday and that the world is becoming a very dangerous place.
Given the scenerio of the long slide to third world status, or complete financial collapse, if all you funds are in a government or private pension program, how would you ever get your money out, not only would it be almost worthless, how would you obtain your funds, how would you cash out your 401(k), if the banks take a holiday and limit withdrawals, how will you collect your savings.
So my dear Texas Ringers I am at a crossroads, to opt out of the company plan, and move to a self directed IRA and a gold IRA, and give up the company match. The question is, can I beat the earnings of the match if I give it up. Or is the real decision giving up the match for control of personal funds and developing a sounder defensive investment plan.
What would or are you doing?
Steven Foste
For the Texas Ring.
Editor’s note: Steve’s article is quite a compliment to all of us, and I think he’s right: you’ll make an excellent brains trust. His topic is certainly “timely,” and it could easily be that others of you are asking the same questions. One basic thought he and I have been kicking around a bit is whether it is safer and more lucrative to pay the tax lump to get out of an IRA/401(K) and refuse the “matching” funds from your employer in return for having control over your own destinies. I’ll leave you here, and go write a basic primer on Technical Analysis. LBT
No related posts.
Kurt says:
August 20th, 2010
8:32 pm
I hold the facts to conclude that the US is sliding towards 3rd world status, on a greased rail. If I could, here is what I would do: get myself and my capital out, ASAP! If the government does not confiscate it, they will inflate it to worthless, that is a forgone conclusion. Even self directed retirement accounts are probably going to become the target of it’s insatiable maw. But if moved out of their grasping reach, your wealth might actually grow.
Oh that I could do such a thing. Unfortunately, I’m stuck here, but you probably aren’t, yet.
Linda Brady Traynham says:
August 20th, 2010
9:12 pm
Kurt…not to be nosy, but WHY can’t you? I keep trying to lure Steve down here for a look-see but he is “chained” by two kids in their twenties, much like yours.
Linda Brady Traynham says:
August 20th, 2010
9:17 pm
That is, don’t want to hear about TEOTWAWKI. Love my kids, can’t relocate ‘em, set my son up with a reasonable chance to make his way across a couple of thousand miles if that is the only choice and made a believer out of him, and settled for seeing my daughter with a month’s food (that being as far as she would agree to go), two sets of sterling flatware for “money,” and a pair of skeet guns. Sometimes ya have to let go, papas. When they won’t listen, if the time comes, look after your own hides. You can’t be trying to organize an escape route out of Los Angeles when the city is in riots and flames. PLEASE, Lord, spare us that. If He doesn’t, let’s keep those plans clear and as up to date as we can.
Kurt says:
August 20th, 2010
9:55 pm
I’m not entirely sure Linda. I think partly because I goofed, partly because of my kids. All I know for sure is that having asked the Lord for who knows how many times, for how long, He does not seem to see fit to let me leave this exact spot.
One of my kids is stuck here for medical reasons, and I have to take care of them. Another is 50 miles south of here, and the Lord seems to keep asking me what would happen to her, and my friend she is with, if I left.
And a couple years back when in prayer group I started finding myself praying “When what comes on this nation hits, please let it pass over this area. You would be just, but please, grace and mercy instead. While the wealth of the nation is hemorrhaging out of it, let if flow here, that it might be known that these are your people and you take care of yours.” I found that coming out of my mouth week after week. I suspect that I’m now trapped here partly for that. Shoulda kept my mouth shut lol.
And I suspect for another even greater, more pertinent, to the point of over riding, reason, but people would really think I’m nuts, and call for the men in white coats, or start praying things they should not.
All in all though, if I have to sit through it, this seems not too bad a spot to be sitting in. And IF my biggest suspicion is right, I might not have to sit here for too long.
Steve Foste says:
August 21st, 2010
4:23 am
Acutally Kurt and Linda, I know at some point ya gotta let your kids be responsible for themselves, but good fathers and there are millions of them out there, we are not all bums, have a very hard time letting go of responsibility, Venus and Mars, we guys just like to be around and be smart and fix things.
Steve Foste says:
August 21st, 2010
4:39 am
I use to laugh out loud when somewould would say bury the money in a can in the backyard, I don’t laugh anymore. I keep thinking about the move the money offshore, but that bothers me even more. If there is global upheaval you may never get it back. And all this electronc money really scares me. All they have to do is shutdown the internet, and they are poposeing that now, and poof, your money is either gone or locked up.If you want to see blood in the streets let Pres. Obama pull that swith.
The entire financial system of america is on and electronic swith. Wall Street, Banks, Government, your personal finances. How do you think you will get your SS checks, Diability checks, Military retirement checks once the pull the swith.
Kurt says:
August 21st, 2010
1:17 pm
Your right about the concept of there being risk in moving your money out of the country, but when I talk of that, I usually mean you go with it. Believe it or not, there are places in the world that I consider less risky than the US. The melt down will be global, but some places will be effected worse than others.
Yea, I agree about letting your kids learn to be responsible for themselves. But this time around, the Lord seems to think that they need me here to help, at least for a while still.
Linda Brady Traynham says:
August 21st, 2010
3:37 pm
The problem with the “It will come back” theory is that we’re talking apples and oranges. If your retirement funds had a million dollars before the bust, and is half that now, what will be the value of a million dollars in your stock market account be perhaps ten years after the event? A million dollars isn’t a million dollars. The dollars will be worth less AND you will be charged capital gains on that increase, and at 20% (the price as of 1/1/11) your million is at best $900,000 less-valuable dollars.
Linda Brady Traynham says:
August 21st, 2010
3:39 pm
Right on, Kurt. In retrospect, I should have taken the bare minimum of things I love and a hunk of cash to Argentina in 2005…except then I would never have met dear Charles or any of you…
Linda Brady Traynham says:
August 21st, 2010
4:10 pm
“Letting go.” Yeah. Do you know why we love our children less as time goes by? Don’t gasp, you know that, you just never thought of it this way. Because if we loved them with the tigress in a rage obsessiveness we do when they are infants and toddlers we could NEVER let them go. We would cripple our children obsessively, denying them any chance of becoming adults.
Not to name any names around here, a couple of gentlemen I admire and am fond of are making precisely that mistake…and the one that goes with it, which is sacrificing your lives long after this is sensible, safe, reasonable, or good for any of you.
A recurrent theme among many of us (far wider than just our fantastic family here) is “I can’t bear to think of what will happen if I leave when I must and they are left behind.” Exactly how (and who) will it help if you die pointlessly? I really don’t want to see my children slaughtered! I don’t even want to die with them.
I want them to act like adults, recognize the dangers, make sensible plans, and hope we all manage to rendezvous in a safe place. Believe me, when it all goes down, Super Mom here is not going to try to beat her way northward 250 danger-fraught miles to haul beautiful daughter back the same distance. I’ve done what I could. I warned her. I explained why. I pushed to the point where she stored (golly, wow) a whole month’s food. I gave her silver for bribes (disguised as mild-mannered forks, knives, and spoons), and what it takes to increase their social and work-related skills by learning to shoot skeet. There isn’t anything else I CAN do, because when they won’t listen, they won’t listen. It “worries” our loved ones that their parents are crazy or dupes. When they won’t listen, they won’t listen and committing suicide second-hand isn’t the answer.
One of my friends spent a year while his bride to be dithered over marrying him. Yes, she adored him. No, she never wanted to be without him. No, she couldn’t bear “not knowing what happened” to her only child, a married woman with grandchildren. Get a grip, woman! You really don’t want to see your “child” die, you make it much harder for your son-in-law (who HAD made barely adequate plans) to take care of his wife, daughter, and granddaughter, and that’s no way to treat the guy you claim you love. Eventually they married and all is well, but it was rough on all of us.
This is a lot like becoming a Christian! People can tell you the Good News, but no man comes to God save through Jesus and the Holy Spirit has to set him looking. We cannot “save” our adult children. All we can do is warn them calmly but sternly of the dangers and urge them to join us in the safest place we can contrive. I will be annoyed seriously if any of you get yourselves killed in riots because you stood around hoping your “children” would come running to Daddy. Or Mummy. Peter Pan’s Dad, now, has got the most gorgeous little blond moppet imaginable, and certainly he is responsible for her physical safety–and has made excellent plans. Trying to scoop up daughters in their twenties to carry them to safety murmuring, “It’s all right, Daddy’s got you,” is neither called for nor sensible. Of COURSE I love my very beautiful, very smart, successful daughter. When I think the time is nigh I will urge her passionately to pick up the dogs and get herself down here immediately. I recognize, however, that I am quite likely to fail to convince her, but I can scarcely kidnap her.
All we can do is all we can do, and the best plan is to try a lower-key approach and keep preparing ourselves. Say it quietly, but make it stick: “When the time comes to flee I’ll give you all the advanced warning I can, but I am going to GOOD at the specific time I will give you. I hope you will be there, but I won’t wait hoping you’ll change your mind. You know where I will be. I love you very much, but I will not endanger myself for no good purpose. Let’s get some popcorn and watch a movie now!”
Linda Brady Traynham says:
August 21st, 2010
4:12 pm
Kurt, my apologies for my inadequate computer skills. I thought I was answering you privately.
Linda Brady Traynham says:
August 21st, 2010
4:30 pm
Kurt, I’m going to bite you on the leg, dear, so brace yourself. YOU think that the Lord thinks you should remain where you are for the sake of your daughters. Perhaps He does, and perhaps you are being presumptuous, and maybe I’m a lousy Christian!
Stay if you feel you must or even if you just want to, but take responsibility for your own decisions. And don’t try to turn this around and say, “If God really wants me to go He will tell me.” God is just a little busy and He gave you a fine mind. Is He supposed to send us all hand-engraved tablets of gold that tell us when and where to go? I, for one, would appreciate that very much, and many is the time I have reminded Him that He says He’s a better parent than I am–but I leave notes for my kids on the kitchen counter. This has yet to result in scarlet ribbons or a post it that said, “Linda, do these three things today. Love, Dad.” Even whining about how His sheep hear His voice doesn’t work.
So I do my best to say every nice thing that crosses my mind and to do the easy, obvious kindness, just as the Good Samaritan did. I give what I have LOTS of, words, goats, eggs, and live the simple agrarian life. (Stifled laughter. Mine, or His?) Has anyone forgotten that this is the plan for the first thousand years? Why not longer? I don’t know. Maybe we’ll all be tired of it, by then. Perhaps there is something better, what I can’t imagine from my earthly perspective, short of the dogs having the vocabularies of three year olds and the crops thriving weed free without any effort on my part and always exactly the right amount of rain.
God loves you, I love you, and you just do the best you can, okay?
Desertrat says:
August 21st, 2010
5:50 pm
I see no reason to disagree with the folks at Agora or with the Doug Casey group about what investments are likely to be profitable. The Agora guys have had around a .900 batting average on stock picks for some twenty years that I know of. A fair percentage of picks with profits in the 30% and more per-year range; few below 15%. They generally have some fifteen to maybe twenty stocks in which they’re invested–and their reasoning has always been quite sensible.
Currencies devaluing? How can precious metals NOT go up?
Outside of that, get out from under any long-term debt, even if you scale down your material standard of living to do so.
Linda Brady Traynham says:
August 22nd, 2010
4:14 am
Gee, Rat…if it all goes bad who is going to try to collect that debt? Steve has a great point about checks ceasing due to government shut down, loss of transportation, bank holidays, whatever. If you can’t receive your check, cash it, or access your direct deposit, then what do you do? Live on what you’ve stored.
Steve Foste says:
August 22nd, 2010
4:18 am
Rat, good to here from you. Scale down, you should see all the useless junk I have been throwing out. Stuff I have spent 1000′s of dollars on over the years that is just worthless now. Debt free I am getting closer all the time.
Linda, I purchased the beginners kit at Adam Mesh, just to see what he had to offer, also sent in a form in regards to coaching, we will see if anything comes of it.
AS for my childen, I am going to keep after them, also develope a simple get out of Dodge manuel with plan A, B, C. They are to stick it in the glove box (why do they call it a golve box) of their car for when the time comes, Along with 72 hour get out of Dodge Kits, which of corse I will probably have to put together. Ther is nothing like fear to make people change their minds.
Linda Brady Traynham says:
August 22nd, 2010
1:37 pm
Well, hurrah for you, and shame on Matt, Christian, or Todd for not sending you a comoplimentary one.
They call it a Glove Box, of course, because originally people put their driving gloves in there. Back then there weren’t stacks of insurance forms, registration forms, and maintenance records crowding the space. There were little crystal vases that held flowers in some models. Life was much nicer a century ago.
Linda Brady Traynham says:
August 22nd, 2010
1:46 pm
I LOVE the idea of this sort of parental involvement! Sure, I told ‘em to get good quality maps and work out routes on back roads, and Andrew actually did, but I’ll bet Beauty didn’t after she had her new house built, and the sprawling metroplex of D/FW is between her and her mommy. I can’t think of better Christmas gifts then the even starter Bug Out Bags. Check lists…routes and probable check points to avoid…portable GPS if we’re rich and they’re likely to have to come cross country…probably some entrepreneurial promise there.
Lynne says:
August 22nd, 2010
10:52 pm
Folks please don’t count on GPS for 3 reasons. 1. The satellites are getting old technology wise and we (USA) aren’t replacing them. 2. The military can send an encryption key in lock civilians out. 3. Solar flare or CME could take out those satellites. Get a compass and map backups.
Yes, we also have been dealing with 40+ year old kids that still need Daddy’s help after they have “screwed the pooch” with same bad choices again and again. But we have a couple of boxes for each of the basics for at least 2-3 weeks that Mom and I made up and I’m storing. One good thing they are all close by and they have a camper, RV or trailer.
Kurt you may want to look through the books of the prophets Jeremiah and Isaiah. Keep seeking the answer and keep working on your prep. I’ll send a little prayer for you as well.
Kurt says:
August 22nd, 2010
11:40 pm
Another thing people tend to forget is that once a weapon is used, countermeasures are developed fast. The US has used GPS in it’s weapon systems a lot lately, and countries like say, Iran, know it. Iran is now prepping for war against the US. It has the capability to launch satellites, which means it also has the capability to knock out satellites by hitting them with a fast moving object. What’s to stop Iran from taking out the GPS system, and why would it not, seeing as how it is readying for a US attack?
I spent some time reading some news today online. What I’m seeing is that the US has almost stood still in the weapons system development dept. Yea, there have been a few things, but mostly improvements on existing tech(stand off, remote piloted, etc), communications, or non lethal weapons. Countries like Iran are catching up in many ways. One more piece of evidence to point to the concept of there maybe being no retirement prospects in the US pretty soon.
Anything in particular in Isaiah and Jeremiah? I’ve read them many times, but I’m always ready for some more, especially if the Lord is telling ya something for me. ‘Preciate the Prayers. Praying for you too. All of you.
Linda Brady Traynham says:
August 23rd, 2010
6:24 am
“My princes are rebels and consorts of thieves?”
Oldmanriver says:
August 23rd, 2010
8:38 am
Steve,
I didnt see any answers to the question you posed in your article. here is my take. I would stay with the company plan up to the point that they match. I would not go farther than that. The matching part is a huge rate of return that you are not going to be able to get anywhere else. It also depends on what odds do you think of the whole nation going south and dissolving. I think those are pretty long odds given recent history of financial collapses around the world, USSR, Asian Flu, Argentina etc etc and what happened in those instances. Their countries basically held together except for the USSR. Im bearish stocks generally just because of the demographics of our nation. As the baby boomers retire and pull money out of their accounts its going to have a huge effect on the stock market. My generation is too small to make up for it. when Gen Y starts putting money into the stock market I will be more bullish, Ill probably be dead by then so thats what I would do.
Desertrat says:
August 23rd, 2010
11:37 am
So the US goes all to garbage. Does that mean that Canada will, also? Do you think travel will be forbidden? Long-term thinking, have a Canadian bank account and a safe-deposit box there. Short-term, sure, you’re on your own during some SHTF thingummy, but that won’t last forever. There will always be some sort of formal business activity.
If you have money, move some overseas. Believe it or not, there are fiscally stable countries. Growth in their economies. All that good stuff. From what I’ve been reading, here and elsewhere, it seems like way too many folks are so Ameri-centric that they have little or no information about what’s going on in the rest of the world. Beaucoup safe investment opportunities out there
IMO, somewhere around ten percent of one’s net worth should be working in what might be labelled “intelligent risk” or “intelligent speculation”. And that ten percent should not be a case of all of one’s eggs in one basket.
Just a personal gripe: This mess has been very obvious for five years, now. For folks to still be thinking about “planning”? “Gonna do”? “Oughta do”? Er, uh, hey, somebody just flat-out hasn’t been paying attention to the world around them.
Oldmanriver says:
August 23rd, 2010
12:10 pm
Rat,
I second that, no body really knows what exactly is going to happen. We just know that things dont seem to be getting all that much better. so hedge all your bets as much as it seems personally prudent
Steve Foste says:
August 23rd, 2010
5:30 pm
Wow, a lot of feed for fodder here, Kurt, as you know better than I do “it will be revealed to you” keep studying that bible. Lynne where do you get and store all this info, what great info. It was also my thought about GPS worthless, get a map, Hell or alot cheaper anyway,you can highlight it and do all kinds of things with a physical map.
OMR, In some ways I agree with you, and I have considered just going to cash and get the match, I would have done as well of better without being “in the market”, the challenge is the it doesn’t compound, Even Einstien said that the greates mystry of the world is compound interest. 72 hour and survival kits for xmas, man that would give them a suprise, I can see their faces now.
Rat, I’m working on it, I can’t do it all instantly, I am a little leaning into OMR, camp there is still time, but be aware of a sudden Black Swan, Why move it offshore, for us common folks how would we ever get to it of get it back. I am working on my 10 percent to be gold and silver and physical possession, and food in the locker, and dry boxes full of ammo.
Steve Foste says:
August 23rd, 2010
5:43 pm
Ok here is my real thought, Rat there are good investments oversees, and yes OMR, I keep working on that 401(k), but the challange I see if the SHTF, those are all electronic funds. They are not real, they are just numbers on a piece of paper. And right now that is the game, but the real money is in physical real intrinsic value Items if we really belive that this country will fall. I have no way to pack up and travel to Canada if the SHTF. I would have no way to get my money or 401(k) cashed in if this crisis comes about, It wouold not even have to be extremly serious to be lock out of your funds at any time.
If things get that bad how would you get out of the country to where you stashed your cash, or owned money, you will need to be a fortune teller, or a private plane to leave.
No my money will stay here, and I will continue to take the risk and play the game, I have a job and a family and I will do the best I can to keep that intact. I will plan as best as possible.
And yes it is my plan to build as much real, intrinsic physical value as I can. This electronic money is a big risk, but right now is is one of the only options available to earn and build future wealth.
All is not lost just yet.
WE ALL NEED TO JUST KEEP IN TOUCH, KEEP OUR EYE’S OPEN SO WHEN WE SEE THE TROUBLE APPROACHING WE CAN GRAB WHAT WE CAN BEFORE IT IS TAKEN FROM US. EACH OF US WILL SEE DIFFERENT THINGS AT DIFFERENT TIMES AND THAT HAS REAL VALUE.
If I sound hard, it just struck me that way today.
Steve Foste says:
August 23rd, 2010
5:45 pm
OOPS,didn’t mean to yell.
Steve Foste says:
August 23rd, 2010
5:55 pm
I ment to say where you Stahed your cash, or owned Land.
Lynne says:
August 23rd, 2010
7:17 pm
Steve I worked with the Tactical and Strategic Satellite folks in the Army. I was in the Cellphone and Data communications area so I work with the Sat. guys setting up links in Europe and USA from SW Asia.
Kurt it was the overall warnings and most folks not listening to the Prophets. Jeremiah 5:12-13 Isaiah 6: 8-13. God can make any danger pass over anyone and for any reason. I doing my best to try and help out family. I suspect they will still struggle. It was not the ant’s fault that the grasshopper died in winter after playing away the summer.
Kurt says:
August 23rd, 2010
7:51 pm
Lynne, I love ya, but sometimes I wanna just throw marshmallows at ya :p
The first can be taken to mean I’m full of wind. The second leaves less doubt, that I must speak out, but nobody will listen. Either way confirms I’m stuck here, much like Jeremiah was in Jerusalem. Most unpleasant thought. This your way of getting even for harassing ya?
Steve, I suspect that cash will fail in many parts of the world, and stashing it might be a waste. Prudent, like an insurance policy you hope never to need, but maybe a waste. Gold would probably be a better thing to stash, silver a close second. Land would be my choice, especially farm land. They might be able to destroy your cash with ease, but doing so to food producing land in your possession might take more effort on their part. A business that produces money in it’s local economy would also seem a prudent purchase after farmland. If the economy in which it sits doesn’t totally unravel, it could produce some income. Just my 2 cents, about what it’s worth too lol.
James the Wanderer says:
August 24th, 2010
1:23 pm
Steve, some options:
(1) Asset Strategies International and Perth Mint Certificates; the Aussies have never confiscated gold or silver like the Yankees have.
(2) The Sovereign Society; purchasing land (esp. farmland) overseas in places like Panama, Colombia and New Zealand.
(3) Your own stash of Buffalos, Eagles, Maple Leaves and Kangaroos.
The match will prove illusory once the Crunch hits; if hyperinflation drives the price of gold over $5,000 / troy ounce, do you think the 4% match will keep up? Will there even be a 401(k) plan after the assets shrink to match the hyperinflation? (How much of your 401(k) is in financial stocks, bank stocks and mutual funds?)
Keep a stash of paper dollars at home for those first few weeks where the ATMs are down or broken; before Helicopter Ben can drop those pallets of $100s, there will be a (very temporary) shortage where you can pick up great bargains for cash in hand; followed by “dollars are poor toilet paper” and gold and silver coins are all anyone will accept.
YES, bug-out bags, stored food, water and fuel, perhaps gasoline (to a limit, dangerous stuff, keep outdoors / ventilated) for emergencies; learn new skills (welding, plumbing, farming, hunting, camping for long-term survival) as broadly as possible. There will be chaos; your planning will be worth it’s weight in LIVES (perhaps your own).
Onward, people; save who you can, yourself first; we’ll need to teach the survivors how not to repeat our mistakes.
Lynne says:
August 24th, 2010
2:01 pm
No Kurt I wasn’t being mean just trying to add a different perspective.
I fear for you but if you believe you are doing the right thing I will support you. I am looking to stay put but have a GOOD plan to fall back on in case plan A doesn’t work out. No more marshmallows bruises please!!
My Mom and I have built boxes for the kids and I store them. In a disaster we should have the kids covered. This seems to work out us, covered everything from an emergency stove to food to a porta-potty/bucket.
Lynne says:
August 24th, 2010
5:56 pm
Stuff will hit the fan. As far as the USA is concerned. We will deal with shortages and rationing. Not cause the Feds want it it will just be reality. We aren’t special as a people we just had a great ecomomic and political system for 250 years. Now the “Powers That Be” (PTB) have decided the don’t need it for power. You are sheep, your are idiots. We will tell you what to think we will educate your children. If that doesn’t work we will pass laws on the simple things first and erode your position. Welcome to Orwell’s Animal Farm and 1984.
Cmon OMR tell me how more government is good for my family and nothing more than sucking on the government Teet?
Steve Foste says:
August 24th, 2010
6:03 pm
James and crew,
Yeah those “damn Yankee’s” cofiscate the gold, put in in a vault and good ole tricky dick, kept the stash and put us on fiat currency, I’ll have to look up his advisors, just check the jail records.
Good thing I know all those animals and plants are gold pieces, could have a good start on a zoo, is a kangaroo in the animal kingdom?
401(k), I already know it is toast. Problem is that the boss will take it personally and as being ungrateful if I opt. out, the short story is it would not go over well. So I am woriing on it. Right now it is 100 percent in the bond bubble, will ride it for a while, then to cash. The government may steal it before I get it changed, we will see. And to change it without paying big penalties is 3 1/2 years away, and that still means going into another government program. I will keep thinking about it.
Land, Land, Land, yes yes yes, but I wish to pay cash for it and don’t have that many FRN”S and it is still expensive, very expensive in relation to income and available savings.
Lynne says:
August 24th, 2010
6:44 pm
Steve I’m sorry about your bosses feelings are hurt but if you can afford the tax hit get out of 401 now. Even the optimists are planning for 5000 point drop now. Deflation is hitting hard and fast now. though most folks don’t realize it. Cash out and stay liquid if at all possible. If I told you in a couple of days the stock market will be at 7000 would you sell?
Heck I’m a moron on investing but I know you can buy a house in Idaho for $50-60 grand if you have credit. I assume you did not join the work force to give some one else positive feedback.
If you have $5000.00 and good credit you can get a 3br and 2ba house for $300.00 per month plus insurance and taxes. Can you rent for that?
Lynne says:
August 24th, 2010
6:56 pm
It know longer matters the meltdown is coming. We tried to warn them. We told them they needed to prepare. Damn I failed Okay I failed now what? I knew I may fail. Actually I knew I would fail on a basic 2-4 weeks of food and water. You may say i have failed. but do you have water? do you have food? Well I’m sure FEMA and DHS will love your victimhood and give you grants 4 months after the problem.
tickmeister says:
August 24th, 2010
8:39 pm
For my money, literally and figuratively, go for tangibles and things you will need at sompe point in the relatively near future. I would rather have silver and cash buried in the back yard than a big number in a 401K if that number consists of nothing except an entry in a computer. Figure out how many pairs of underwear you will need for the rest of your life and buy them. (My grandfather was prone to observe that about one more clean shirt would do him on days when he was feeling poorly.) No matter what, get out of the bigger cities. If things go bad and you don’t escape quickly, you are doomed. You will help the kids more by setting an example and providing a destination for them than by staying and going down with them.
Kurt says:
August 25th, 2010
12:43 am
LOL, that’s actually a very good idea ticketmaster. I would have never thought if it. If you buy what you can now, like a life time’s worth of underwear, you won’t need as much when it melts down will you?
But a life time supply of underwear? Why didn’t I think of that one? I love it.
Steve Foste says:
August 25th, 2010
5:30 am
Lynne, it is not about hurting his feelings, you would have to know him, In these economic times it is about keeping your job and income.
I like the idea and the cost of homes in your area, but my job and family are here. And that my not meet my criteria for self sufficient land. I am leaning very hard towards a 5th wheel and truck to pull it with. I am thinking around the 30 to 35000 dollar range for both, finding a place to park it is another issue. Electricity, water, and sewer and secluded is a challange. I have also considerd a Yurt, only time will tell.
I have thought of tickmeisters ideas, I keep looking at buying those bags so I can vacume pack them into smaller storage units, just to many things to buy, but packing up and vacum packing my excape clothes is a good idea.
Linda Brady Traynham says:
August 25th, 2010
6:56 am
Dear Tickmeister:
I loved every golden word!
Crew, all those fine, sensible passionate letters, you’re wonderful, and how did so many stack up in just a couple of days of dogs barking, lawyers, and men talking when I’m trying to write?!
Guys, I KNOW I have mentioned buying long term supplies of obvious things when we catch them on sale, including a friend who bought a gross of socks. Towels, when they’re really on sale, for one. Extra stainless pots and good knives. I got a dozen sets of very high thread count sheets when the price was right. Sheets are good for lots of things and they have been expensive for a long time. I thought of that again, today, in the context of the VAT they keep threatening with us. Sounds like a good plan to pick up what we know we NEED that will suffer the most under that horror.
Um…do me a favor and pull up http://www.dumpdc.com. One of my usual “these things just happen to me.” I commented on an excellent article, the editor read some of my stuff, and all of a sudden this is “Linda Brady Traynham Week!” Honest! Isn’t that a riot? He’s running a bunch of stuff from W&G. I could use a few comments, please. And talk about feeling as though I am 4 years old and next in line to sit on Santy Claus’ lap? I flipped out when I found one of my very most favorite writers is on that site! (It is a very well done secessionist site, actually. Very restrained.) Fred! You know, “Fred on Everything” Fred! If you don’t, you’ve got a treat in store. Gosh, no, I don’t want to correspond with him. That would be as silly as talking to Paul Harvey if you had met him. Just sit down and let him talk!
Oh, gasps of laughter, my very own “week.” What’s next? My own postage stamp? Not under this regime, for sure. Hugs, dear ones. Linda
Linda Brady Traynham says:
August 25th, 2010
7:08 am
Steve, Steve, Steve, NO. No, no, no, no, no. Drop at least a zero. $30 to $35 is FAR too much to put into that project, even if a miracle happens and you are able to buy some land and live in it for a while. You can do far, far better on Craig’s List, I’m sure, but I’ll pull up Denver and look. The only thing we paid more than $100/running foot for was the Grayhound Bus motor home, at twice that, and it has enough storage space and gas tank capacity to haul more than most of us own that it would be sensible to bug out with.
Let me go see what I can find, sugar, and you finish your new article. Hugs, Linda
Linda Brady Traynham says:
August 25th, 2010
7:13 am
Okay, things are expensive in Denver because there is a lot of nice stuff for sale–as it ought to be at a thousand/foot! However, there were a couple of nice-looking rigs for around $100/foot, including a 27-footer in Arvada.
Steve Foste says:
August 25th, 2010
8:21 am
LOL, I new when I put that number up it was going to come back to haunt me. Dear, I still wish for a bit of luxury.
Steve Foste says:
August 25th, 2010
8:29 am
Close to half of that was for the truck. Ok I could buy an older truck and have it rebuilt. I do wish for dependability, I am a bit leary of late model RV’s the old FORD, acronym, for overhaul and repair daily, If I get on the road I don’t want to see any unforseen unintened consequences.
Lynne says:
August 27th, 2010
7:46 pm
I believe no one without data. With that said we can all read data wrong. Can the DJIA come back of course, and long term it has a great return. But any worthwhile broker will tell you diversify. Some item go up and some go down but major sectors tend to be set off on profits an losses. I think your average American has no concept of policy all he can do is invest in many sectors and hope to break even. Markets no longer follow trends, they are driven by speculation. (Sell it off to someone that doesn’t know whats going on)
Linda’s favorite hard assets, it covers you in both deflation and inflation IF YOU OWN IT and have it in hand otherwise it’s not yours and you are a slave to your creditor. Can you walk away from your home? can you give up your toys. Paid off is a nice feeling. Out of debt really is nice. A bit inconvient to use Layaway or Christmas club at the local CU. But a whole lot cheaper than those interest rates.
Get basic and get simple. What do you need to live? Food, water, shelter/sanitation and security. That’s it, everything else is a bonus. What’s cool is you starve the government beast. If you look at your investment portfolio and you can’t meet those 5 basic items in home and have them in hand and accessible. Why are you investing In the the Stock marcket and not yourself?
Read history they tend to mark the passing of rich dead people.Doggone it I have a GED and a couple of history courses. I’m not well educated as the folks around here but you can’t see the forrest for the trees. I may be wrong about getting food and water supplies which are fairly cheap right now. If I’m wrong I’ll sing hossanahs, but what if I’m right. The worst you have to lose is not going shopping for a month or 2. Is that bad? But if I’m right…. What if there is no food to buy? What if there is no water out of the Tap? Think about it? Don’t tell me won’t happen cause it has happened all the time in the USA and all over the world. It will happen, You have all the gain and nothing to lose.
David Franklin says:
September 3rd, 2010
3:53 am
Dear Steve,
All… and I mean ALL…US electronic “savings” funds, in any WILL BE CONFISCATED by not less than 75%, just as they were in Japan after the 80′s. It is the ONLY WAY…the private central banks can maintain the purchasing power of their private scrip, and thus maintain their supreme power position of acquiring the Real Wealth of the People, for absolutely NO RISK and NO LABOR.
As this happened in Japan, Malaysia, and virtually every other country in the world, it will…and MUST happen here.
The only way to protect one’s self, is to convert those ‘electronic funds’ into REAL WEALTH NOW, before they are confiscated.
Possession is nine points of the Law. Real Wealth is eleven points of the Law.
Convert now, or pay the certain future consequences of “trusting” total strangers with what you “believe” is yet yours.
Sincerely,
Dave
Tony says:
September 25th, 2010
8:30 am
Lynn,
Youse sed:
Doggone it I have a GED and a couple of history courses. I’m not well educated as the folks around here but you can’t see the forrest for the trees.
Having spent some time in the schools, both at a student and a teacher, I make the following DEMAND:
PLEASE, do not confuse schooling with education.
The most educated person I know got as far as the sixth grade.
always,
tony
Tony says:
September 25th, 2010
11:55 am
Steve
For wot it’s werth, here’s MY two scents–clove and pine
First of all, you have to define what you think will happen. There are an infinite number of possibilities. For analysis, let’s take “good”, “bad”, and “ugly”.
I’ll define “good” as “business as usual”, “muddle through”, “good times”, “recovery”, etc.
I’ll define “bad” as severe inflation/deflation, perhaps depression.
I’ll define “ugly” as hyper inflation or massive deflation, a breakdown of society, disruption of communication and supply lines, food riots in cities, roving gangs, etc.; the society described in Rand’s “Atlas Shrugged”.
In MY personal opinion, it is the U.S. and a few other countries that will experience “bad” and perhaps “ugly”. Other countries–particularly emerging nations–are not as well developed and dependent upon technology. Many are agrarian. The people are used to hard work and are rather independent. As near as I can tell, many of these countries are growing and coming out of the recession.
Clearly, if the future is “good”, few unusual precautions need be taken. Social Security will remain solvent, as will Medicare. The economy will recover (oops, sorry, Bammy–I forgot it already recovered), housing will begin to appreciate and the DOW will again reach 15,000. One obvious thing is to keep your passport up to date. You will need it to vacation in other countries (or escape to them). If you believe this, you can stop reading here.
If the future is “ugly”, I question the value of gold or currency. I also question the notion of getting out of debt. If you are deeply in debt, the mechanisms (courts, etc.) for collecting that debt (and even the ability to accept payment) may not exist. I can easily see a person with a million dollars of debt that he accumulated buying farmland, gold, a house, farm equipment, etc. sitting on a million dollars in cash thinking, “I wish I knew to whom I should pay this debt and how to do it. My bank doesn‘t exist anymore.” Even if the mechanism existed, in the case of hyper-inflation, the debt could be paid with much depreciated dollars. That “farmer” might be able to sell a tomato and use the proceeds to pay off the mortgage. (For wot it’s werth, my house is mortgaged to the hilt.)
In such a case, self sufficiency would be paramount. Goods that can be bartered would be important. Things like ammunition, seeds, canned/dried goods, gasoline with stabil–an additive that keeps it from deteriorating), etc. Perhaps even potable water, cigarettes, coffee, batteries, booze, drugs (both legal and illegal), SALT, condoms, and garden tools. A portable generator would be quite valuable.
It is that awkward “in between” stage that is of concern. How does one prepare for “the bad”, with the concomitant inflation/deflation?
I would suggest that the most dangerous animal in the world is a panicked politician. They are already talking about confiscating our retirement funds “for our own benefit” and they ain’t even panicked yet. As such, I suggest that you want to obtain control of these funds as soon as possible. Those of us here on The Ring are sort of plugged in. Since it takes a bit of time to accomplish such things, I suspect we will have some warning. Will we have enough? At my brokerage firm, it takes three days to liquidate stocks, and then they can overnight the check. If you have a considerable amount of cash in your account, you might consider moving the cash to a local bank (keeping it in an IRA), particularly if that bank will honor same day requests.
First of all, if you have a traditional IRA or Roth, find out how long it will take you to withdraw the funds. (If it’s more than a week, find another administrator and move the funds. A situation could arise where you would withdraw the money and cheerfully pay the penalty and taxes.) Taking all your money out of a 401(k) could be a real mistake. Between the penalty and taxes, you could lose a lot, in addition to antagonizing your boss. (Think about it from HIS point of view–he is offering a “gift” and you are saying “shove it”. Not only that, but he is using that money to give his company low interest loans.) You can drain your 401(k) by BORROWING the money from it. Set up the loan so that it is a second mortgage so that the interest is tax deductible.
Put the money into some “safe” short term fund. Should the economy go south with deflation, you can repay the loan with the money. Should the economy go south with inflation, that account will pay much more in interest that you will have to pay. The worst case is you beef up your 401k by the amount of interest payments. FOR GAWD’S SAKE, DON’T SPEND THE MONEY.
If you expect massive deflation, you should certainly keep all investments in U.S. dollars (USD). If you expect inflation, you should diversify out of USD. There are several ways to do this.
The apparent way is an off-shore account in a country/bank without ties to the U.S. The drawback is that should things get “ugly”, you may have no way to access these funds. The obvious rejoinder is, “Should things get ‘ugly’, what would you do with the funds if you COULD access them?” Another retort is that this country is 1,500 miles north to south. That means that everyone is within 750 miles of a border. That’s a ONE DAY hard drive. (That presumes that THOSE countries are “secure”.) Of course, you should report any account over $10,000 on your 1040.
A safe deposit box in a foreign country might be a good idea. Here you could store cash, diamonds, gold, or other valuables. You may consider actually taking possession of your stock certificates. Placed in a foreign safe deposit box should make them quite secure. If you then “escape” to that country, you will have the means to live until you can get the “lay of the land”. Since no income is derived, it need not be reported. It is my understanding that a safe deposit box is not an “account”.
There are many companies that exist that will open an account in a foreign country. Google “off shore accounts” and visit some web-sites. The cost is somewhere between $800-$1,200 and it can be done from your home. The Cadillac plan establishes a corporation and creates the account in the name of the corporation. The corporation has a local address. The only connection between YOU and the ACCOUNT is your signature. Hence a computer search of the accounts will not turn up your name. Of course, you should report any account over $10,000 on your 1040.
If you KNOW someone in a foreign country, things become much simpler. That person can open an account in your name with HIS address. If he has a U.S. bank account, you deposit CASH in his account. He withdraws the cash out of his account and puts it in YOUR account. Many banks have on line banking; also many will give you an ATM card so you can withdraw funds in the U.S. in USD. Of course, you should report this account on your 1040 if it exceeds $10,000.
Alternatively, you may buy some land off-shore–a “vacation house” which could be rented and perhaps show some positive return. An advantage of this is that you don’t have to report the house as “income”–though you do have to report the rental income. If you don’t believe ME, ask Charlie Rangle.
Let’s look at some other ways to diversify out of the dollar. Consider taking possession of some solid foreign currency (Swiss Francs??). If you don’t want to take possession, consider EVERBANK’s foreign CDs. Alternatively, consider buying foreign stocks/bonds. Such stocks/bonds are denominated in the currency of the country in which the company is domiciled. The value you see on the stock exchange is the CONVERTED dollar value. Of course, there is always gold and silver. If you want a bit of risk, try foreign gold mining stocks. There you get the currency play AND the gold play. (The “smart money” is saying silver is the better play.)
As with all of my advice, if you take it without checking with someone who knows what he is talking about, you deserve what you get.