Run For The Lifeboats!
I have a confession to make. When I am driving I like to listen to the oldies. Yesterday I heard a classic I hadn't heard in years that made me stop and think about the current crisis. "Dance Band on the Titanic" by Harry Chapin. Harry's song evoked a strong feeling about what I see going on around me and how it must have been on the Titanic.
As you may know the Titanic struck an iceberg just before midnight on its maiden voyage on April 14th 1912 and sank several hours later on the 15th of April. She was considered unsinkable at the time. Prior to the Titanic striking an iceberg she had received six warnings of sea ice, yet she was moving at almost full speed when the iceberg she finally struck was spotted. There were an estimated 2,224 people on board and of those more than 1,500 died. The Titanic was woefully short on lifeboats, which is understandable considering she was "unsinkable!"
I first started writing about the coming danger to IRA's and retirement plans a number of years ago. My initial thought was the government was going to find a way to force all retirement plans into U.S. Treasuries. You can't imagine some of the comments I received from fellow financial advisors. They clearly thought I was completely delusional and many of them stated that it could simply never happen. IRA's and retirement plans are "untouchable". (Replace untouchable with unsinkable)
As time has gone on other newsletter writers and advisors have begun to pick up on the same theme as I have because they have been able to spot "the sea ice" while on deck.
I have written a number of warnings about the "sea ice around us" over the last few years.
- The Department of Labor and U.S. Treasury Department are looking into ways to promote the conversion of retirement plans into an "annuity payment."
- Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at the New School, New York, said: "I would roll back the cap to about $5,000 and then redistribute the savings to workers without pensions in the form of a tax credit of $600, and that would be revenue neutral. It would be a lot fairer and would expand pensions to more than 60 million people who currently don't have pensions."
- The "Cyprus Seizure" I wrote about language hidden in the TARP bailout that could allow for an instant seizure of your IRA and or savings accounts just like they tried in Cyprus. NECESSARY ACTIONS.-The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following: Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties related to this Act as financial agents of the Federal Government as may be required. At the stroke of a pen or an executive order banks could be ordered to seize assets.
- A proposal by Retirement USA that among other things calls for Pooled Assets that should be professionally managed, Lifetime Payouts, mandatory contributions and sharing of the wealth. Retirement USA is a national initiative working for a new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. Retirement USA is convened by five organizations - the AFL-CIO, the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare, the Pension Rights Center, and the Service Employees International Union
- The potential for the seizure of gold and other financial assets- A client sent me a 9 page report Global Forecaster - Global Watch written by Julian D. W. Phillips titled: "How to Protect One's Gold from Government Confiscation". In this article, Julian makes a very strong case for why Gold could be confiscated, he wrote:"Tier I Asset Brings the Banking System to Gold Gold's elevation from a Tier II asset (where only 50% of its value can be allotted to the bank held assets in terms of capital ratio) to a Tier I asset (where 100% of its value can be allotted to bank held assets in terms of capital ratio) is expected to be implemented on January 1st, 2013.
- The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency's first foray into consumer investments. "That's one of the things we've been exploring and are interested in in terms of whether and what authority we have," bureau director Richard Cordray said in an interview.
The government's premise is they can do a better job of managing your IRA or Retirement Plan than you can and they want to take over control for your own good. There is absolutely no doubt in my mind this is a precursor to forcing everyone's retirement plans into U.S. Treasuries. What better way to help finance the future growth of our deficit spending!
I wrote about the U.S. Consumer Financial Protection Bureau's plan to take over retirement plans on February 5th and frankly I was stunned by the lack of reaction. That's when I knew not everyone is going to make it into a lifeboat as they clearly think the ship is unsinkable.
Warning Number 7- A seizure of retirement plans leading to the forced investment of all assets into treasuries appears highly probable.
I really never thought a straight forward seizure of assets was even a remote possibility but I have now changed my mind. Clearly the seizure of personal savings accounts was never in the minds of anyone banking in Cyprus when out of the blue it almost happened. Cyprus is like the Cayman Islands in that it is an offshore banking center with a lot of assets from Russians and others seeking an offshore haven. That's why the European policymakers thought they could do a snatch and grab... Cyprus also has it's own version of FDIC Insurance, which the policymakers swiftly declared would not cover such an act.
I know what you are thinking, this could never happen here. Think Again!
"California businesses fuming over retroactive $120M tax grab"
The courts in California have decided that a completely legal tax break that have been claimed over the last few years by over 2,500 small businesses and entrepreneurs is no longer valid. To add insult to injury the want the money back with interest.
"How would you feel if you made a decision, which was made four years ago, (and) you absolutely knew was legally correct and four years later a governing body came in and said, 'no, it's not correct, now you owe us a bunch more money. And we're going to charge you interest on money you didn't even know you owed'," Brian Overstreet told Fox News from his office north of San Francisco.
So here we are on the Titanic moving along at almost full speed, the markets are at all time highs, there are some of us out there yelling we see ice in the water, while others are telling us it doesn't matter the ship is unsinkable. It doesn't matter how high our national debt is or what our economic policies are. In the background I can hear the dance band playing.......
Harry Chapin - Dance Band on the Titanic
And now the foghorn's jammed and moanin'
Hear it groanin' through the misty night
I heard the lookout shout down "There's icebergs around"
"But still everything's all right"
This is the U.S.A. and our ship is unsinkable!
And we were blowin' waltzes in the barroom
When the universe went CRASH!
"There's no way that this could happen"
I could hear the old captain curse
He ordered lifeboats away, that's when I heard the chaplain say "Women and children and chaplains first"
Well, they soon used up all of the lifeboats
But there were a lot of us left on board
There aren't many lifeboats left but if you run now you just might make it. Put your IRA or Retirement Plan in a lifeboat and send it now while you can still protect it. "Liberate Your IRA", while you still can.
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- Precious Metals
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