Will the gov't confiscate IRAs?

[BrightAnarchist]

http://www.shtfplan.com/precious-metals/liquidate-iras-and-401ks-or-suffer-grievous-losses_12082010

"This means that at some point in the future, when government comes under pressure from debt buyers to raise interest rates in order to offset the risk of a depreciating dollar and potential for default, the interest payments on our debt will rise significantly. Some estimates suggest that 60% of our outgoing payments will eventually be interest – a number so large that it will literally destroy the US economic system as we know it. At some point, our international line of credit (provided by China, Russia, Japan, et. al.) will be cut off.

"In a last ditch effort to prevent complete financial, economic, political and social collapse, the government, like those in Argentina and Hungary, will move to seize private assets of Americans. Those assets are primarily held in IRA and 401k retirement accounts and they will become the targets of government intervention."

[TheBitcoinChemist]

Under the right conditions, almost certainly.  401k's too.

[RodeoX]

I don't think this would happen because no one would stand to gain. If people saw this possibility coming they would divest before hand. That would drive prices off the cliff and destroy any value in those assets. That's what I would do. The broker gets paid, I take a big hit, but the gov gets nothing but worthless paper.

[TheBitcoinChemist]

I don't think this would happen because no one would stand to gain. If people saw this possibility coming they would divest before hand. That would drive prices off the cliff and destroy any value in those assets. That's what I would do. The broker gets paid, I take a big hit, but the gov gets nothing but worthless paper.

How would they 'divest' without taking a huge tax penalty?  Either way, govco wins.

[RodeoX]

I don't think this would happen because no one would stand to gain. If people saw this possibility coming they would divest before hand. That would drive prices off the cliff and destroy any value in those assets. That's what I would do. The broker gets paid, I take a big hit, but the gov gets nothing but worthless paper.

How would they 'divest' without taking a huge tax penalty?  Either way, govco wins.

I don't look at that as a penalty since it will be the first taxes I pay on that money. Still I will loose about 30% I think. but 70% is better than losing possession of the account.
Not a great outcome, but if this were attempted we could play spoliator and bring them down with us.

[vampire]

As RodeoX said: not really much govt can do before we pull our funds out. And certainly that party would loose a lot of believers.

[Littleshop]

And the government can't do this by just causing inflation?

[TECSHARE]

It is already happening in other parts of the world and is in the works already in the US only it will be called "austerity measures". Yes people do stand to win, the ones scooping up all the capital at firesafe prices, as well as everyone shorting those funds. The economy is a zero sum game, someone losing always means someone else winning, even if it means chopping your neighbors feet off so you appear taller. When it gets put down in the books you still look 4 inches taller.

http://www.humanevents.com/2010/10/08/new-lame-duck-threat-to-bailout-union-pensions/

[BoardGameCoin]

The economy is a zero sum game.

A healthy economy is positive sum.

[BrimStone]

I believe what we will see in the United States related to IRA and 401K accounts would be the Government requiring all of these accounts to have 20% to 50% U.S. Treasuries.  This is how they would "confiscate" the money in them.  The U.S. Treasuries would only pay 0.5% return and inflation over time would take your value.

They don't have to pass a law demanding you give them the money.  They can just "help" you with a law giving you the "stability" of a better investment in your retirement accounts.  They will tell you the stock market is "too volatile" and "too corrupt" so you should trust the Government with your money.  LOL.

Easy as pie.

-Brim

[vampire]

I believe what we will see in the United States related to IRA and 401K accounts would be the Government requiring all of these accounts to have 20% to 50% U.S. Treasuries.  This is how they would "confiscate" the money in them.  The U.S. Treasuries would only pay 0.5% return and inflation over time would take your value.

Its the same as confiscation. I can pull them out and transfer to an offshore brokerage account.

[RodeoX]

The thing is I can't imagine this even being proposed in the U.S. It would have zero support from all quarters, most importantly the wealthy elites who really make the decisions won't allow it. Having said that, we are at the beginning of the end of western power. Who knows how an impoverished and weak America might act?

[BrimStone]

I believe this process will begin with some type of "reduce Government spending" push.  This would get fiscal Conservatives all excited and put the big government Liberals on the defensive.  The next step would be to outline all the "savings" from the "cuts" but then the story would change to "and we will be forced to find more revenue".

This will lead into a grand compromise in which most parts of the federal government take 10% spending reductions but a long list of new revenue (taxes) will be proposed.  In that portion you will see either reductions on the limits for IRA and 401k contributions, forced acceptance of Treasuries in retirement accounts, a "new" retirement "pension" plan which would look great on paper would be a rehash of the Social Security system.  This would be explained as being required to "close the budget gap".

Once the taxes and such are passed the cuts will vanish and the process of slowly grabbing the IRA and 401k money will begin.  Anyone with a lot of money in these will be branded as "rich" or a 1%er and targeted for confiscation.

As the Government handouts for Welfare, Food Stamps, Social Security and the like start to get smaller and smaller, the voices will get louder to "take" the "stolen tax revenue" from the IRA and 401k people.

-Brim

[BrightAnarchist]

I believe this process will begin with some type of "reduce Government spending" push.  This would get fiscal Conservatives all excited and put the big government Liberals on the defensive.  The next step would be to outline all the "savings" from the "cuts" but then the story would change to "and we will be forced to find more revenue".

This will lead into a grand compromise in which most parts of the federal government take 10% spending reductions but a long list of new revenue (taxes) will be proposed.  In that portion you will see either reductions on the limits for IRA and 401k contributions, forced acceptance of Treasuries in retirement accounts, a "new" retirement "pension" plan which would look great on paper would be a rehash of the Social Security system.  This would be explained as being required to "close the budget gap".

Once the taxes and such are passed the cuts will vanish and the process of slowly grabbing the IRA and 401k money will begin.  Anyone with a lot of money in these will be branded as "rich" or a 1%er and targeted for confiscation.

As the Government handouts for Welfare, Food Stamps, Social Security and the like start to get smaller and smaller, the voices will get louder to "take" the "stolen tax revenue" from the IRA and 401k people.

-Brim

This scenario seems very believable. It's amazing what gov't will do when they run out of money - just about anything is more politically palatable than cutting off entitlements.

Just look at the municipalities that are going bankrupt... they wait until the last minute, and then finally cut all salaries to minimum wage. Funny thing is, the unions are complaining about the pay cuts, but the reality is that few people understand the meaning of BROKE.

[BrightAnarchist]

Yeah, more on this BROKE stuff:

http://www.youtube.com/watch?v=-Zqp7cuwmPQ

[westkybitcoins]

Of course they'll raid IRAs and other accounts, one way or another.

They'll either raid them directly, or hyperinflate them into oblivion, or enact some other scheme to confiscate your wealth. The U.S. economy is too far gone now, this sort of move is inevitable.

[vampire]

Of course they'll raid IRAs and other accounts, one way or another.

They'll either raid them directly, or hyperinflate them into oblivion, or enact some other scheme to confiscate your wealth. The U.S. economy is too far gone now, this sort of move is inevitable.

You can't really hyperinflate them.. If you have a house, you can't hyperinflate it. If I own a company, I will still own the same amount of the company. I have 0 cash in my account.

[TheBitcoinChemist]

Of course they'll raid IRAs and other accounts, one way or another.

They'll either raid them directly, or hyperinflate them into oblivion, or enact some other scheme to confiscate your wealth. The U.S. economy is too far gone now, this sort of move is inevitable.

You can't really hyperinflate them.. If you have a house, you can't hyperinflate it. If I own a company, I will still own the same amount of the company. I have 0 cash in my account.

Wow, you really don't understand what we are talking about here, do you?

Is your only access to economic thought Paul Krugman, Vampire?

[westkybitcoins]

Of course they'll raid IRAs and other accounts, one way or another.

They'll either raid them directly, or hyperinflate them into oblivion, or enact some other scheme to confiscate your wealth. The U.S. economy is too far gone now, this sort of move is inevitable.

You can't really hyperinflate them.. If you have a house, you can't hyperinflate it. If I own a company, I will still own the same amount of the company. I have 0 cash in my account.

If you have $100,000 in an IRA, and the value increases 10x, but the price of everyday goods increases 1000x, that isn't a hyperinflationary obliteration?

[TheBitcoinChemist]

Of course they'll raid IRAs and other accounts, one way or another.

They'll either raid them directly, or hyperinflate them into oblivion, or enact some other scheme to confiscate your wealth. The U.S. economy is too far gone now, this sort of move is inevitable.

You can't really hyperinflate them.. If you have a house, you can't hyperinflate it. If I own a company, I will still own the same amount of the company. I have 0 cash in my account.

If you have $100,000 in an IRA, and the value increases 10x, but the price of everyday goods increases 1000x, that isn't a hyperinflationary obliteration?

In his defense, real estate property is largely immune from hyperinflation; but unfortunately not from property tax re-valuations.  By one path or another, every type of investment that is normally measured in currency is subject to the confiscation of value due to hyperinflation of that currency, although some paths to that end result are indirect.