September 14, 2010

Greeks (and Americans) Being Forced to Give Up Their Wages, Retirement

We suspect that when the Dow hits 4,000, the average pension fund will have assets to cover 30% to 40% of benefits. That said, they will probably cut payouts by some 50% or more. This should occur in a year or two. In two to three years public pensions and Social Security will be cut an equal amount.. As we have said previously, pull cash values out of life policies and terminate annuities. Many insurance companies will go under. We have listed several already near the edge. State insurance funds will be unable to cope with the losses as the financial edifice falls apart. - Bob Chapman, Crime, Corruption and Collapse on Wall Street, The International Forecaster, March 11, 2009

"If one understands that socialism is not a share-the-wealth programme, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs. Communism or, more accurately, socialism is not a movement of the downtrodden masses, but of the economic elite." - Gary Allen, None Dare Call It Conspiracy, Concord Press, 1971

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. - Justice Litle,
Is America’s Economic Recovery on the Whole Based on a Rotten Sham?, Daily Markets, April 20, 2010

Greece and the U.S. Stock Market Crash

Early Retirement Blog
May 8, 2010

As soon as the Dow dropped 1,000 points in 15 minutes last week, the financial headlines were written, screaming “Greek Debt Fears Cause U.S. Stock Market Crash. A few hours later, Greece was temporarily forgiven when the mysterious “machines” got blamed.

Two days later, the financial press is back to blaming Greece for a slumping U.S. stock market, and warning their readers of the dangers a Greek debt contagion could have on the U.S. economy.

What is going on? Why is the financial press so obsessed with Greece? Greece’s economy is the size of Ohio’s: if Greece implodes, the impact on the world economy will be very small.

The reason why the U.S. financial press is so busy pumping out Greek Debt fear articles is because the financial press and the mainstream media are owned and controlled by Wall Street. And the Wall Street banksters are afraid that they will be forced into restructuring unknown billions of dollars of debt they loan sharked to European countries.

In a previous article I wrote a few weeks ago (see next story), titled “Your Big Fat Greek Retirement” (which got passed around internally at Goldman Sachs — Hi Goldman Sachs, yes I do look at my web stats), I exposed how Goldman Sachs used the New York Times to blame Greek workers for the Greek debt crisis.

Now, a few weeks later, Wall Street is once again using the U.S. media to try and scare Americans in an attempt to force European workers into giving up their retirements, health care, education, and economic freedom to pay back their fraudulent loans.

An article today by the Associated Press titled “Fears intensify about Greek Crisis’ impact on U.S. lays it all out. The AP article warns that the Greek Debt Crisis could affect the U.S. economy.
“There is some negative effect on the U.S. economy, no doubt,” said Michael Mussa, senior fellow at the Peterson Institute for International Economics. Still, Mussa said the impact in Europe will likely be greater. While Greece’s economy isn’t that large, many major European banks hold billions of dollars of its debt. Should Greece default on or restructure its debt, which many economists expect, those banks — still recovering from the 2008-2009 financial crisis — may cut back lending to conserve cash.”
For those of you not familiar with the Peterson Institute for International Economics, it is an organization funded by Pete Peterson, a Wall Street billionaire “investor” who is hell bent on robbing your retirement. I’ll expose that evil bastard in a future article, but now back to Greece and Wall Street and how it affects you.

What the AP article conveniently leaves out is that Greece may owe European banks billions of dollars, but it also owes Goldman Sachs billions of dollars as well. And Goldman Sachs is hell bent on getting paid in full for the fraudulent loans it made to a previous conservative Greek governmentloans made by Goldman Sachs so that Greece could hide its debt and enter the European Union.

Goldman Sachs and a previous Greek government were engaged in accounting fraud. And now Greek workers are being forced to give up their wages, retirements, and other benefits so that Goldman Sachs can get paid back in full.

There is no Greek debt crisis; however, there is a massive Wall Street investment banking fraud crisis. The AP article title says it all, “Fears intensify”… Wall Street wants you to be afraid when, in reality, it is Wall Street that is living in fear.

If Greece defaults, or restructures their fraudulent debt, Goldman Sachs and Wall Street will lose billions of dollars. And it may encourage other European countries — Spain, Portugal, Italy and others who also owe Wall Street billions of dollars — to restructure their onerous debt.

How determined is Goldman Sachs in getting their fraudulent Greek loans paid back in full? Besides having their financial media whores write bogus articles to scare you, Wall Street has been engaged, as Max Keiser likes to call it, in “financial terrorism” against Europe. For the past few months, Wall Street has been driving down the value of the Euro to force reluctant European countries into bailing out Greece and Goldman Sachs.

In the past couple of days, German, French and Spanish parliaments, with their economies being held hostage by Wall Street, passed the Greek (I mean Goldman Sachs) bailout. And guess what my fellow Americans, so did you — except you didn’t get to vote when $8 billion of U.S. taxpayer money via the IMF went to bailout Goldman Sachs via Greece.

It’s the same shell game that was played with the infamous AIG bailout — where Goldman Sachs got paid in full, by U.S. taxpayers, when their specious derivatives insured by AIG blew up and the U.S. government bailed out AIG.

The reason why the U.S. financial and mainstream media were so quick to blame Greece for the U.S. Stock market crash is because they have been deeply engaged in a Wall Street-sponsored propaganda and misinformation campaign against Greece and Europe. Their knee-jerk reaction in blaming Greece for the U.S. stock market plunge exposes their journalistic fraud.

Why should you, the American people, care about the U.S. financial and mainstream media being used by Wall Street to go after Greece? Because the U.S. financial and mainstream media is also being used by Wall Street to go after your retirement. Ah ha!

What is happening in Greece is coming to America — in fact it’s already started. There have been many articles (and will continue to be even more articles) written by the U.S. financial and mainstream media which argue that you need to give up your retirement to pay down the debt and deficits that threatens the U.S. economy. Guess who’s behind those articles? Ding, ding, that’s right, Wall Street!

Wake-up America and stop reading and viewing the U.S. financial and mainstream media, which is nothing more than a modern day Trojan Horse for Wall Street and Goldman Sachs.

Your Big Fat Greek Retirement

Early Retirement Blog
March 15, 2010

This ain’t a movie with a happy ending. Greek workers are in the streets protesting to try and save their retirements. The Greek government has already announced that the retirement age will be raised from 60 to 63, and has pledged to do whatever it takes, to get their debt levels back to EU mandated levels.

Greek workers are being asked to pay for the corruption and criminality of Wall Street banks and past Greek governments with their retirements. Why should you care what happens to the retirements of the people of Greece? Because you’re retirement is next.

Remember when the New York Times served as the propaganda tool for the folks who wanted to invade Iraq to rob their oil? They’re at it again.

This time around, the New York Times is serving as the propaganda tool for the folks who want to rob your retirement. A front page article in the March 12, 2010, edition of the New York Times blames Greece’s retirement system for the economic problems facing Europe, and suggests that Greek workers, European workers, and U.S. workers will need to sacrifice their retirements.

The situation in the United States is different but also painful. The government will face its own fiscal reckoning, analysts say, as 78 million baby boomers begin drawing on Social Security and Medicare programs to support them in retirement. Without some combination of higher taxes, benefit reductions, or an increase in the retirement age, both programs will run short of money to make their promised payments within the next few decades.

Why do Greeks (and Americans) have to give up their retirements? According to the New York Times, it’s because:
“Its pension promises will grow sharply in coming years, and investors can see the country has not set aside enough to cover those costs…”
Who are these “investors” that want Greek workers to give up their retirements to insure they get their loans paid back? Goldman Sachs.

From the Washington Post:
Goldman served as investment banker for Greece as the country borrowed billions by entering complex financial contracts known as cross-currency swaps. The contracts allowed Greece to limit the amount of debt it seemed to be taking on to fund its national budget.
Now, with a widening budget deficit, Greece has been struggling to raise money to pay off old debts and continue to fund government operations.
Goldman Sachs lent, and then helped hide, the billions of dollars of loans that it made to Greece so that it could enter the European Union. Now, worried that it may not get paid back for its role in helping Greece commit accounting fraud, Goldman Sachs wants Greek workers to give up their retirements.

The New York Times story about how Greece’s economic problems are due to its retirement system, and why Greek workers will need to give up their retirements, is nothing but a propaganda piece for Goldman Sachs.

And, as you can see from the earlier quote about how Americans will have to accept higher taxes, reduced benefits, and a later retirement age, they’re coming for you next. In fact it’s already started. President Obama has been trying desperately, even before he was elected, to put together a team (Budget Deficit Commission) to rob your retirement.

Yes folks, as painful as it may be to hear, President Obama wants to rob your retirement. Your Social Security and Medicare to be exact. Why? Because your Social Security and Medicare benefits is money that the government owes you. Just like Greece, the U.S. government needs to reduce its debt and deficits so that it can keep paying its investors. And the easiest way for the U.S. government to reduce its debt and deficits is to rob your retirement.

Who are these “investors” that want American workers to give up their retirements to insure they get their loans paid back? Same answer as above — Goldman Sachs.

Shame, once again, on the New York Times. And shame on you if you let Obama and Wall Street rob your retirement to pay for tax cuts for the wealthy and out-of-control military spending.

Here are more articles from the retirement blog on why, how, and who, is trying to rob your retirement:

Please Do Not Retire
Obama Wants Your Retirement
Wage Slaves to Wall Street
Retirement Propaganda to Keep You Working
Why Goldman Sachs is Dangerous for Your Retirement
Wellderly - A New Word to Rob Your Retirement

Obama Needs Your 401(k) to Balance His Budget

New American
August 25, 2010

The Obama administration is “taking the first steps to confiscate retirement dollars,” according to Dr. Jerome Corsi who predicts that the end result will be retirees with 401(k) plans holding near-worthless government debt “that will be paid off in a devalued currency worth … pennies on the dollar.”

The move to confiscate those retirement dollars for government purposes was best illustrated by Christina Kirchner, President of Argentina, in 2008 when she announced plans to seize her citizens’ private pension funds [see next story].

Writers at the Heritage Foundation said that while Kirchner claimed such seizure was necessary to protect her citizens’ investment accounts from the global meltdown, “most observers believe[d] her real motive [was] to use the $30 billion in seized assets to ease the massive debt obligations her leftist spendthrift government [had] run up.”

The The Wall Street Journal agreed, saying that “taking over the … pension fund assets [would] ease the cash crunch faced by [her] government.”

Corsi said he has a letter from the Treasury Department, Bureau of Public Debt, informing U.S. citizens that the federal government is rolling out a new program called “Treasury Direct” that will allow citizens “to purchase, manage, and redeem…savings bonds” electronically, as well as offering an option to purchase such bonds automatically through payroll savings or a personal checking account. This happened to coincide nicely, according to Corsi, with a bill offered by Senator John Kerry (D-Mass.) to create “Automatic IRAs” that would require all employers and employees to invest in IRAs using that automatic deduction option, “whether they want to do so or not.”

And this happened to coincide also with a program being pushed by the Service Employees International Union (SEIU) called “Retirement USA” which would create a government-forced retirement program with assets being directed into special Treasury Retirement Bonds, or R-Bonds. “Retirement USA” is promoting the idea that all workers have a “right” to a government retirement account, in addition to Social Security and any private pension plans those workers already have in place. Others behind “Retirement USA” also support more government dependency for workers, including the AFL-CIO, the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare and the Pension Rights Center.

All of this is being promoted by the idea that individual citizens aren’t saving enough for their retirement, and that consequently government has to “do something.” Rep. Jim McDermott (D-Wash., above photo), Chairman of the House Ways and Mean’s Committee’ Subcommittee on Income Security and Family Support, is confused about whose money is in those 401(k) plans: the individual contributor, or the government.

He said that “since the savings rate isn’t going up for the investment [Congress is making] of $80 billion [in 401(k) tax savings], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.”
The world view of Rep. McDermott is revealing, and brings clarity to the point of view of many in the Washington establishment that the $4.5 trillion currently invested in 401(k) plans and other private pension plans that enjoy tax breaks actually belong to the government, and that when Congress loses $80 billion that would otherwise flow to Washington due to those tax breaks, it’s an “investment” that must “generate what we say it should”, or else it must be replaced with something else that works better.

The real “story behind the story” was revealed by Joe Wolverton here when he said,
…since the day of his inauguration, Barack Obama and his congressional co-conspirators have consistently and unapologetically set out to systematically nationalize the economy of the United States: first the banks; then the insurance companies; then the auto industry; then healthcare; and now the piece de resistance, the private savings accounts of millions of middle-class Americans.
But, thanks to the SEIU and their program “Retirement USA,” it’s all dressed up to look like a good deal for unsuspecting owners of retirement plans. In “Making the Case for a New System” they take the view that
“A secure retirement is part of the American dream. Yet our retirement system is failing many Americans. Social Security is the cornerstone of our system, but as currently structured, is not meant to be our only retirement program. Pensions and savings plans are supposed to fill the gap, but too many workers don’t have plans, and too many plans don’t do the job.”
They complain that:
Private retirement plan coverage is not UNIVERSAL…
For millions of Americans, private retirement benefits are not SECURE…
And Private retirement benefits are not ADEQUATE…
And, continues “Retirement USA”’s website,
“Social Security must be preserved and strengthened… [and] we must encourage employers to offer and maintain them.”
Underlying all of this is, of course, the statist presumption that government knows best what’s good for the citizens, and when the citizens’ behavior fails to meet government expectations, then mandates and force must be used to do for those citizens what the government thinks is best.

And the fact that Washington is looking at annual trillion-dollar deficits “for as far as the eye can see,” that $4.5 trillion of private monies is just too tempting to ignore.

First Argentina and Now the EU - Who Will Be Next?

Charles Newman has had a variety of experiences getting to where he is today. He claims to have spent more time at the pool parlor ...

May 31, 2010

To be realistic, we have to recognize that the federal government's growth rate has been accelerating, and continues to accelerate, under the present administration, while at the same time, the private sector continues to shrink. So, the real question is "How will the government sustain itself?"

The logical solution would be for the government to do what we all should do, and that is to learn to live within our means. Realistically, the government (i.e. most politicians) never will support that approach for multiple reasons, including procuring enough votes to ensure re-election. Also thwarting this approach is the fact that US debt is becoming less attractive to foreign buyers (Source: Washington Post, April 7, 2010). Therefore, the only alternatives seem to be:
1. Print more money,
2. Generate more revenue through increased taxes, or
3. Figure out new ways to access OUR assets.
Just to set the background based on facts, let us review what happened in Argentina. In 1902, Argentina was one of the richest countries in the world. At that time, the US was the only country close to Argentina in terms of being the second most powerful economy in the world. Both countries were running behind Great Britain.

In 1916, a new president was elected. The campaign appealed to the middle class and was predicated upon "fundamental change." The changes that were implemented included: "mandatory pensions, mandatory health care, and support for low income housing ... to stimulate the economy."

These programs resulted in two major changes:
  1. The government assumed more control over the economy.

  2. New taxes were assessed to fund the government's efforts.
Not surprisingly, after some time the government's payouts exceeded the taxpayers contributions. Do you think this is starting to sound a lot like the US entitlement programs -- specifically Social Security and Medicare? If you are not getting concerned yet, then read on!

The situation in Argentina only got worse under the Peron administration when the target of all the rhetoric first focused on the "rich" and then broadened to include the "middle class." Under Juan Peron's administration, government went through a rapid expansion, labor unions grew and social spending accelerated geometrically. Long after Peron was gone, the government continued spending way beyond its means, resulting in "hyperinflation" in 1989.

By 1994, the net result of all of the new income taxes, taxes on the wealthy, value added taxes, etc. totally crushed the private sector. In 2002, Argentina was experiencing an economic collapse very much like the Great Depression in the US.

In summary, in a period of 100 years Argentina declined from the number two position in the world to a state of abject poverty whereby they were unable to meet their debt obligations.

Just think what would happen if America follows the same path as Argentina. As reported by the Heritage Foundation on October 31, 2008:
Argentina's president "announced she would move forward with her plan to seize the nation's private pension funds.... seizure of the funds is necessary to protect Argentinian's from the global market crisis. But most observers believe the real motive is to use the $30 billion in seized assets to ease massive debt obligations her ... government has run up."
If our government adopted the same approach, perhaps on a more subtle basis, IRA accounts alone would provide access to about 4 trillion dollars. Just think about how many new government spending programs, new Czars and new agencies that amount of money could support!

I would have to say that seizure of assets most likely is beyond the scope of probability in the US. Seizure of retirement assets probably will not happen, but eating away at OUR freedom of choice regarding retirement savings could happen one bite at a time.

Consider the following:
  1. The New York Times recently recognized that Social Security already has begun to "pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until 2016, according to the Congressional Budget Office."

  2. The US Treasury has begun introducing proposals to provide various incentives to divert money toward "government approved investments."

  3. Based on a study conclusion that most Americans have saved very little for retirement to supplement their Social Security benefits, there are advocates in the present administration who are proposing to force workers to save five per cent of their income. Maybe that is not such a bad idea except that it is further proposed that these savings go directly into a "Guaranteed Retirement Account" run by the government. The net result of this proposal would be to leave less for you to control through an IRA. Moreover, you have to ask yourself, What would protect this account from ending up in exactly the same condition as Social Security?
I do not know about you, but it seems to me that there is an ill wind blowing us all down the same path as Argentina. Keep your eyes open! Watch for the first step, which likely will be naming the US Government Czar of Retirement!

As an added thought: If you cannot relate to Argentina's history, take a close look at the growth of social programs in the European Union during the past 60 years, and look at where they are today!

The timeline for failure seems to be shrinking -- it took Argentina 100 years; it only took the EU 60 years. How quickly will the next country fail financially, and more importantly, might it be us?

Are You Starting to Believe Me Now?

Neal Boortz
May 5, 2010

I've been warning you since the mid-1990s that if the voters of this country were ever stupid enough to put Democrats back in charge in Washington, the Democrats would make a move to seize all or a portion of their pension plans. Judging from some of the emails and Tweets I've been receiving the past few days, people are starting to believe that I just might have something here.

There are a few things driving this move.
  1. First we have labor unions.

    Union pension plans are dangerously underfunded. Union members are nervous, and the Obama folks are listening. One solution unions seem to be pushing is some sort of a government takeover -- seizure, if you will -- of private 401K retirement plans out there and the redistribution of those funds to shore up union retirement plans. The idea seems to be that the government would "guarantee" some sort of retirement for all, unions and non-union workers alike, with the funds collected from the once-private retirement plans.

    A story in this week's edition of Human Events details a request by the Obama Administration to the Departments of Labor and Treasury to provide information regarding the "annuitization" of private 401K plans through something the Obama crowd calls "lifetime income options." Yeah ... lifetime income options paid by and controlled by the government. The Republicans are prepared to fight .. but until next year they don't have the numbers.

  2. The second scenario in which the government could seize our 401K or IRA plans isn't really getting all that much attention ... yet. Maybe I just dreamed it up. Here's the scenario:

    Obama and the Democrats, with no small amount of help from the Republicans, continue to spend America into bankruptcy.The deficit grows and our national debt grows even more hideously. Finally China, facing some economic problems of its own, decides it owns enough U.S. debt. Treasury tries to auction some more debt instruments, and China shows no interest [see next story].

    Suddenly the Imperial Federal Government is faced with a problem ... who is going to buy U.S. Treasuries? Just how much interest are we going to have to pay? Answer? Why, we'll make our own citizens buy them! The next thing you know the Democrats are rushing to pass legislation mandating that all outstanding funds in 401K and IRA plans be immediately used to purchase a special issue of Treasury Bills!

    If you want to maintain the tax advantages of these retirement instruments you'll have to invest the money in low-yield Treasuries and hold "your fair share" of American debt. Good bye to making your own investment decisions and good bye to any decent rate of return on your retirement savings.

Well ... at any rate, glad some of you are paying attention now. With this anti-capitalist in office and his dog washers controlling the congress you have to remain vigilant.

Its Official: China is Unloading Its Treasury Bonds
August 26, 2010

It looks like the smart money these days is found in China. While American investors have been scrambling over each other to buy more Treasury bonds at historically low yields, China has begun quietly unloading some of its own enormous holdings. In June, the Middle Kingdom sold $21.2 billion of paper, reducing its net long to $839.7 billion. This is little more than 10% of the total $8.18 trillion in federal debt that Uncle Sam has outstanding.

Total foreign ownership of US Treasury bonds amounts to $4 trillion, up from $2.4 trillion in three years. Instead, the Chinese have been buying Japanese government bonds, which today carry a paltry 0.9% yield, but have the merit that they are denominated in a rapidly appreciating currency. The Mandarins in Beijing have also been picking up a variety of bonds in Europe which have seen yields pushed to near records, thanks to the debt crisis there.

Officials at the People's Bank of China say that it is all part of a broader diversification effort away from the greenback. PIMCO's Bill Gross has apparently been taking Mandarin lessons on the sly because he has also been paring back his own massive holdings in longer dated Treasuries. To understand why, take a look at the chart below of the spread between the Dow dividend yield and the ten year Treasury yield which has turned positive for the first time since 1955.

US Treasuries owned by China

Foreign country ownership of Treasuries

dividend yield

Courtesy: Mad Hedge Fund Trader

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