401K Gold IRA Joke

The newest investment strategy is the gold 401k rollovers.  The first thing to remember about a 401k plan, is that the gold cannot be physically in your possession. 

The first rule of buying gold, is that you take possession of it. If you can’t touch it, you do not own it.  Gold is not a retirement plan; it is a hedge against a country ruining its currency.

 If your currency is stable, you can buy gold with no problem. If it is unstable, gold will not be available for purchase at any reasonably price.  

 The big thing about retirement as you age, is that it creeps up on you slowly. Your concepts have to change as you age.  Gold as a hedge against inflation at age 40 with a life expectancy of 80 is different than if you are 78 wondering if you’ll live to see 98. 

 If you are young, gold is probably a better investment than a 401k.  The problem is, most people cannot save for retirement at a young age, they will spend it.  The 401k keeps them from spending it; but that is what the government wants. They can borrow your hard dollars today for inflated dollars 40 years later.  50 years ago, cigarettes were 25 cents a pack, now they are $8.50.   So, to save for retirement if you are young, with this systemic inflation, get ahead of the curve and buy gold.

 I digress, a 401k gold IRA will have costs:  the gold purchase commission, insurance and storage fees.  On top of that, suppose you sell the gold at a higher price?  Get ready, you have a 1099 for appreciation, coming your way at tax time.

 Another thing not mentioned, is the integrity of the company offering the gold IRA.  In Europe a while back the gold depository couldn’t pay the depositors in gold, they didn’t have it.  They paid them in cash. Most of these investment firms can buy an amount of gold that covers withdrawals. The rest is invested for financial return.

 The thing you need to realize about a 401k fund is that they don’t have to invest your funds as designate. They do have to pay on your investment as it would have performed. If you have one, how do they deliver the gold bullion to you? Think about that!

 Figure that you have 400k in your 401k.  In the last 5 years, its buying power has dropped to 200k.  That is kind of upsetting. What I can buy cost twice as much and it is still locked into the 401K.  Technically you still have 400k to retire on.  If you had put it in gold 10 years ago, you’d still have the same amount of gold, but its price has doubled. You cannot walk out of a 401K you are stuck with it; you can’t sell it all at one time and get out of it, without horrendous tax consequences.

  We are not talking about investment here; we are talking about government-initiated inflation.  Inflation is a tax by government. The government cannot tax people who have no money, they can only tax people who have savings. They can directly tax your savings or indirectly print dollars that make your savings worth less. My 400K retirement now has the buying power of 200K today. Kind of sucks, doesn’t it?

 To preserve your savings, you need to liquidate your 401k in reasonable increments, and buy gold or platinum.

 Remember one thing when the government runs out of money, they have only one place to go to, the people that have saved money. If you have no money, the government doesn’t give a damn about you.

 Gold, Silver and Platinum maintain value. Right now, everyone is interested in a gold IRA.  Figure this though, an investment in platinum is just as good as gold and it is half its price, and four times rarer.  Hmmm ---of course the obvious escapes most of us, go figure!

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Supreme Court Trump Delima

The Supreme Court is discussing the legal parameters of whether Trump has immunity from prosecution for acts in office. I think that the court has to also consider another issue.

Can a federal office holder be arraigned in a state court for violations of state law? From my point of view, it would appear that all state violations would have to be presented in Federal Court.  This relieves the plaintiff from defending themselves in 50 individual state courts.

What we are discussing is not the fact of innocence, but rather the fact of the ability to finance a defense.

We need a supreme court ruling that allows for the defense on a federal level of all federally elected employees. The states would have no jurisdiction.

This somewhat prevents the states from ruining people with frivolous lawsuits.  Just maybe there is someone listening.  I hope so.

Why the Road to Hell is Paved with Good Intensions

Recently we saw a four dollar rise in the minimum wage in California. The consensus among the legislators was that no one could live on $16 dollars and hour.  The people in labor force rallied around that suggestion. The trouble is, the logic failed after it became law. The real assertion should have been, you need a roommate or two to live on $16 per hour.  Thousands were laid off. The door, for the people just looking for that first job, to get into the labor market has slammed shut.

[The next paragraph is from my memory; the dollar amounts may be wrong]

A while back, maybe 15 years ago the California legislators realized that the utility companies were buying natural gas at about $3 a therm on a 5-year contract. They noticed at the same time that the spot price for Natural gas was about $1 per therm.  The legislators decided to let the contracts expire and not to renew them.  They were going to buy natural gas on the spot market at the lower price.  Since there was no contract for the Utilities anymore, spot prices for natural gas shot up to $20 per therm. Heating bills went through the roof.  I don’t think that this summary of the events has ever seen print, rather, the gas companies were accused of gouging the consumer. Another case of pure stupidity on the part of legislators.

Here in San Diego in 2018, we were requested to use less water and we did.  Since we did such a great job, they had to raise our rates. The problem, the amount paid no longer covered the fixed rates of operating the utility. This is now happening all over again as I speak.

During the Great Depression of the 1930’s, many municipalities raised their property taxes because of the loss of income from foreclosures. They needed more money to fund their budgets. The net effect was less revenue generated and an increase in foreclosures. People barley holding on, threw in the towel and picked up and left. We are beginning to realize (for the first time- since everyone is dead that remembers the mistakes from before) that the legislatures’ have no concept of economics. Common sense suggests that if you double taxes you double revenue.  What you really get, are unintended consequences.

Right now, the national debt is over 31 trillion dollars.  I calculated it out a few years back, and if the interest rate hits 8 ½% we as a country cannot pay the interest on the national debt. The taxes collected will not cover the interest on the national debt.  Congress (collectively) has no idea how previous spending is related to the money already borrowed.  The mentality is, it has worked for the last 60 years, it can last forever.

You have to ask one question; was it obvious to the citizens in previous Banana Republics (Germany, Zimbabwe and Venezuela, that inflation would make the currency worthless? It happened very gradually.   Many lost their life savings. Scrounging through a garbage can for food was not what they envisioned for retirement.

We need to look at gold as a store of value and as an instrument that the government cannot monitor or manipulate the price of. Our congressmen are not going to willingly ruin our savings, their utter collective group ineptness will doom us to financial ruin.  Remember one thing about gold, if you cannot hold your gold, in your own hand, you don’t own it!

An interesting Solution

Judges at various levels in the United States are making political rulings that show no show no bearing to the laws of the land.  These judges can keep on making rulings and causing a lot of grief.  Not everyone in court can afford to contest these judge’s ruling.

What would happen if a higher court or the Supreme Court ruled against a judge and stated that any other rulings by this judge in the future, would have no merit or judicial enforcement in the court system. This would be a way for the courts to clean their own house. The judge would be out of a job.

It's an interesting solution, could it work?

The Interest Rate Conundrum

Everyone in the United States (I exaggerate) refinance their homes when interest rates hit 2.25% and of course, this was a new 30-year loan that made payments lower, but longer.  And they probably refi-ed so they could take more money out and enjoy life.  Now interest rates have jumped to 6 %---and for some, up to 8%. Many people now find it hard to afford a home.

The banks loaned money at 2.25% long term to homeowners for 30 years.  Now, the banks’ depositors want higher interest rates. Depositors can withdraw their short-term savings and deposit them elsewhere at a higher rate.  The problem is the banks cannot cover the spread.  Essentially, they are bankrupt. They loaned hard money at 2.25% long term, for 30 years, and cannot afford to pay the depositors current rates.  You cannot make a promise long term if the short term makes it impossible.

The government lowered the interest rates artificially to lower the payments on the national debt.  This robbed retired savers of their retirement interest income. Everyone refinanced, and the new problem, inflation crept in.  Raising interest rates only makes it worse. And that is where we are at.

This happened once before with the Savings and Loan collapse of the 1990’s. Of course, no one remembers back that far. Do they? That problem was a minnow, this one is a whale.

The New Bill of Rights for the US of A

 If you are broke and own nothing, you can do whatever you want within reason.  You can shoplift up to $999 per day, every day.  Use the streets as a public toilet. Camp wherever you want. And beat up and threaten any one of your choosing. And if you are an illegal alien, you can drive drunk or beat your wife with a coat hanger and get no jail time.  To add injury to insult, since there is no bail, the perpetrator can return, to beat the crap out of the person who turned him/her in to the police.  And if you are a witness, you get a free swimming lesson in the bathtub or some hot lead air ventilation.

 But if you have a job and pay your taxes, God help you, if you don’t pay that your speeding ticket.  Own a home, you are a sitting duck, the government can tax you to death.  If you have some money, you can be sued for frivolous offenses.  The police will not waste their time arresting a deadbeat or a drug addict. The offender gets released back on the street.   But look like a regular citizen, they can milk you for any offense of the law.

 These new ideas of bail reform (no bail) are destroying our system of law and order. If I can plunder $900 dollars a day and not go to jail, what is that in real wages?  That is $328,500 a year.  I could bore you with what it costs for a working stiff, paying taxes, to afford cocaine, but the point is, he doesn’t have the time to really get involved in drugs like a homeless person can.

So, remember, as a tax paying citizen, you have rights:  the right to pay taxes and the right to obey the laws or be fined by the courts. Be silent and make no waves.

 If you are a dead beat, the laws don’t apply to you.  Do what you want. You have no money and are therefore of no interest to the government.  A sad perspective on life, isn’t it?

Can we spend beyond our means forever?

 Can we spend beyond our means forever? Let's see, 31 trillion dollars times six percent is 1.86 trillion.  That’s the interest on the nation debt.  Add 5 trillion. Recalculate,  now we are at 2.1 trillion in interest on the debt.

The real problem, taxes are not really covering what we are spending.  The National debt is funded by banks that have money deposited in them.  This money is from retirement funds.

You have to admit that retirees have saved for retirement for a lifetime and the money is there, they saved it.  One problem, the banks have loaned the money to the Treasury.  I’m not sure of the amount, but it must be between 31 trillion and 52 trillion.

It’s like Social Security, the money was collected and borrowed from the fund to finance the debts of the federal government. There is an IOU that’s declares, the money has been deposited to the SS fund. The trouble is, it has been borrowed by Congress and has been spent.

Basically, we have to ask one question, “How can our retirement and savings be there if it has already been spent?”

Technically it is there, because people only draw out small amounts and the government can cover the withdrawals.  The Ponzi scheme is getting some sunlight.  At what point does the house of cards collapse?

The retiree is not going to draw out their  whole retirement amount, the tax rates would forbid it.  But what if I told you, the money wasn’t there for everyone, It has been spent and you will not be able to recover it.

The Weimar Republic in 1923 ruined the monetary system of the German Republic. People’s savings were destroyed.  History doesn’t remember much, but people well off, were left with nothing, their savings were gone.

Old people were reduced to scrounging trash cans for something to eat.

This could happen again only this time it will be in the USA.  It kind of sucks, doesn’t it?

The Unseen Catastrophe

 Congress has been printing money at a spendthrift rate.  Interest rates were low, and now they are rising.

The national debt is at 31 trillion.  The big thing for Congress is, what is the interest payment for the next fiscal year?  What are the implications.

As the interest rates rise, so does the interest on the national debt. The thing to remember is, most people in Congress have not had any education relating to economics. The other thing to remember is that most voters have no idea of what economics is all about. We have a lot of people that think everything is normal and today will be like yesterday. So, what this boils down to is the fact that we could have a meltdown.  

It is kind of like Southwest Airlines.  Everything worked until it didn't.  

If /When the interest rates hit 8% the government cannot pay the interest.  What happens at that point? Your 401K is dust.  They have borrowed everything you have saved and spent it.

Can you spell Zimbabwe? 

Remember eggs don't cost more, your currency buys less.

The idea that costs are rising is absurd.  It just takes more dollars for the purchase.  The government has pissed in the whisky. They have printed what they could not tax out of us.

At some point, when they can't pay the interest on the national debt, the real problem begins. Insolvency.

Precious metals could save your retirement.

I've seen cigarettes go from 25 cents a pack to $10--tell me I am wrong.

The claim "Democrats vote early"

Every wonder why when it comes election time, you hear the phrase “Democrats vote early?”  It’s treated as a known fact.  There is no way statistically, that that statement can be substantiated. Most would agree that it would probably be about a 50-50 split.

Let’s look at the term “early voting.”   This has to involve a paper absentee ballot.  Early votes are those cast before election day. The regular votes are tallied and then the paper ballots are counted. 

If one accepts the premise that Democrats vote early, it is no surprise to see Democrats rise past their Republican counterparts when the absentee ballots are counted.  The conclusion “Democrats vote early” is valid.

What you could be looking at is election fraud.  Why would more people vote Democrat than Republican in just the absentee ballots? Nobody raises that question, after all everyone knows Democrats vote early.

Any good statistician could, after looking at the polling numbers of the live voters, could project out the totals for the mail in ballots.  From there, the election commission or whatever it is called can create the necessary winning ballots.  Many ballots mailed out, are not returned and some of the voters are dead or moved.  So, in an election where say there is about one million voters, there is about 5% to 20% not returned. Skimming one or two percent of the vote, could determine the winner.  No one will know. Democrats always vote early. 

Also with absentee ballots, you can sell your vote for cash.  $200 dollars for groceries for your kid or vote, make the decision.  Millions of dollars are spent on these elections, and it is not all going to advertising. $200 a vote buys 5,000 votes with just one million.

We need to get rid the idea that “Democrats vote early” and end absentee ballots.

Do things really cost more?

The mentality of the population in the USA thinks that prices are rising.  Things cost more. It is kind of laughable. The actual fact is, the dollar is worth less than it was yesterday.

 Things are not more expensive; the dollar has lost value.  $20 used to fill a gas tank in the 1960’s.  Now in 2022 20 gallons of gas costs $120. 

 The fact to realize, is that things don’t cost more, your dollar buys less.  Politicians’ blame this price rise on the gas refiners and the stores.  How dare you gouge the consumer!                    

What we are really looking at is an erosion of value of the dollar---it doesn’t buy as much as it used to.

 The concept to look at is: a rise in prices doesn’t mean the item is more expensive. The dollar doesn’t have the purchasing power it once had.