by Scott Causey, GWP Resource Correspondent
Two things will always be true about capital controls: they will always fail in the end and they will always protect the guilty. The Swiss have printed unprecedented amounts of francs to peg their currency against the euro. In the end, that decision will have a cost that is impossible to calculate. Not only are they intentionally keeping the value of their currency artificially low to have a shot in hell at having an export market to the rest of Europe, they will also suffer disastrous fallout after the artificial peg finally fails. The market always takes its pound of flesh in the end, despite the most dubious of efforts by mankind.
How comforting is it to know then, that the Obama administration is wasting no time in pushing for a nationalized 401k and IRA plan? The largest debtor nation in the history of the world cannot wait any longer for the low-hanging fruit of the roughly 9 trillion dollars held in American retirement accounts. A recent hearing sponsored by the Treasury and Labor departments marked the beginning of the Obama administration‘s efforts to nationalize the nation’s pension system, and to completely eliminate 401ks and IRAs from existence. Deputy Treasury Secretary, Mark Iwry, presided over these hearings. Iwry is a long time critic of 401k plans, because he says they benefit the “rich” and were originally designed as a tax haven for corporate executives. Here is a short video of Mark Iwry and his fellow cronies gleefully discussing how much better they will be at managing your financial affairs than you could ever be.
The administration’s vision of how this would transpire is to essentially take the newly confiscated retirement accounts and roll them into what would essentially be annuities that pay out pre-defined benefits at some arbitrary time in the future that is, as of yet, not disclosed. Let’s spell this out, shall we? The very same group of bureaucrats that have held seats in the Senate for decades, who long ago bankrupted the social security trust fund, now want to “manage” your 401k plan. What glorious vehicle do these jackals and thieves want to place your money into? Why, the US Treasury’s, of course! Every central bank is in simultaneous competition to see who can create a hyper-inflation holocaust first, and the US government wants you to invest in bonds. For anyone new to “Market 101”, bond prices move inversely with inflation. As inflation intensifies and rises, bond prices fall. None of this will be discussed at these types of hearings that are held and moderated by the players within the administration that know the real reasons for this agenda.
It’s simple, really. There are simply no new natural buyers of US treasury paper. The sovereigns that have in the past allowed us to monetize our record-shattering deficits are finally stepping away from the table. A quick look at some of the latest available data from the treasury’s own website confirms this. The top two foreign holders of US treasury debt are China and Japan. From September 2011 until September 2012, China reduced treasury holdings from 1270.2 billion dollars down to 1155.5 billion. I’ll attach the link here to the treasury’s own numbers so you can see for yourself just how much of that slack Japan picked up for Uncle Sam.
This would be the very same Japan whose own economy is still reeling from a tsunami (both a natural one and a man-made one). The Fukushima nuclear disaster from 2011 continues to symbolize grave long-term consequences for a country that has a debt to GDP level in excess of 230%. As a reminder, historically speaking, bad outcomes are usually seen above 90% debt to GDP. Japan’s demographics exacerbate these debt problems, as most of their population is no longer exactly what would be described as a “spring chicken”. So a debt-riddled, aging country with an energy crisis (Japan essentially has no natural source of hydrocarbons) is, for the moment, sopping up the treasury issuance that China no longer finds appealing. Do you think that might be because they are seeing an opportunity to push for a new reserve currency to settle international trade outside of the US dollar? Unless you only pretend to read Global Wealth Protection, you probably already know the answer to that.
These forces and trends, ladies and gentlemen, are why the buyer of last resort to monetize US debt is going to include more than just the US Federal Reserve in the near future. In the same basic way that Bank of America was saved by putting their depositors’ money at risk to pacify nervous international counter-parties, so will the US government be temporarily bailed out with your 401k money. Why anyone would question this logic with smoking gun after smoking gun materializing for over 4 years now can only be explained as herd mentality. These psychopaths talk about their plans openly and in broad daylight, and yet people still shake at the thought of liquidating what they have within a system that asks them to bend over at every turn. If you’re comfortable with your return on “investment” and have been paying into social security for more than 5 years, then I highly encourage you to leave your 401k as is for the vultures.
For everyone else that thinks the things we write about in these pages has merit, I’d like you to consider the fact that Japanese Pension Funds have been buying physical gold lately. I’d like you to consider how completely and totally unsurprising that is after the man that runs the largest bond company in the world essentially comes out in the light of the day and tells them they must do so. In the bond world, when Bill Gross speaks, people listen. Are you listening yet? Do you hear the train whistle? Can you see the flicker of light coming through the tunnel? I can and I have.
Watch for this in the coming weeks. The misinformation campaign will continue to get louder. Websites and individuals that practice in truth and practical solution will continue to be harassed if they are fortunate and shut down if they are not. The window for your time to act grows smaller by the day. The administration is already talking of a deficit this fiscal year in the neighborhood of 1.6 trillion dollars. That’s a big hurdle to clear in a very unstable global bond market. Keep your monies in electronic form within this debt paradigm, and very very soon you will become part of their solution and your own problem. Take a look around the world. Do you really think you need to see one more enemy when you look in the mirror?