Reading time: 1,045 words, 3 pages, 2.5 to 4 minutes.
It’s happened. Just as I predicted. And, we’re next. The Polish government has confiscated private pensions. And, just as I wrote in the Back to the Dark Ages about the Cyprus ‘Bail-in’ that was perpetrated on a small country first and then used as a blueprint for others, so too will the Polish confiscation be played out everywhere else. Coming to a country near you.
Of course, the propaganda presstitutes covered it up with misleading headlines spinning it as an “overhaul” of the retirement system with the headline
The innocuous byline is “Reform moves bond assets from private to state fund”. In other words, they’re confiscating private pensions and converting them into government bonds. That doesn’t sound so bad does it?
Remember, the price of bonds is the opposite to the movement of interest rates. Interest rates are at all-time lows and they are starting to rise. They have nowhere to go but up. Central banks are losing control along with their influence. As interest rates rise, the price of government bonds fall and the value of your pension based on government bonds diminishes. Kiss you pension good-by.
The Polish Prime Minister said “We believe that, apart from the positive consequence of this decision for public debt, pensions will also be safer.” Right, he’s doing you a favor by stealing your money and transferring it to worthless government bonds.
Zero Hedge summarized it thusly:
1. Government has too much debt to issue more debt
2. Government nationalizes private pension funds making their debt holdings an “asset” and commingles with other public assets
3. New confiscated assets net out sovereign debt liability, lowering the debt/GDP ratio
4. Debt/GDP drops below threshold, government can issue more sovereign debt
So, this will allow the over-indebted Polish government to borrow more and continue to spend like drunken sailors. My apologies to drunken sailors; when they run out of money, they STOP spending. And, Poland is not alone. All countries are in the same boat. Poland is simply the first and, once they get the details ironed out it will be the blueprint for other countries.
Will it happen here? Yes, it’s only a matter of time. When? I don’t know. We may (“may” as in I don’t know for certain) have a couple years. That’s important because one way to protect your private pension (RRSP, 401k, Roth Ira, etc.) is to cash it in, take the tax hit and make like Warren Buffet by exchanging it for “stuff”, preferably stuff that generates an income. You may not have to do it all at once. You can soften the tax blow by spreading it out over several years.
As governments are awash in debt, they can’t acquire more so first they’ll steal your saving from the banks first (‘bail-ins’). However, that won’t be enough because, as I’ve said endlessly, we are past the point of no return. First it will be your savings. Next it will be your pension funds.
Below is Jim Sinclair’s recipe for Get Out of The System (GOTS) from his Commentary of September 5, 2013.
For your reference, here is my GOTS check list:
1. Your equities are held in certificate form.
2. You have no Federal income tax favored retirement funds.
3. You have no CDs and investments in bonds.
4. You have modest money deposited among selected BRICs countries.
5. You store your own precious metals.
6. You have no mortgage obligations.
7. You keep cash on hand for 6 months expenses.
8. You have no consumer debt at all.
9. You have a small hobby farm for protein and veggies outside of where you are living with no mortgage debt, set up green.
10. You have a gas, diesel or electric car with high fuel mileage for the farm.
11. You have a generator with large fuel capacity for the farm.
Note the reference to all retirement accounts. Those accounts are going to be targeted and your hard earned assets will be replaced with a special issue of sovereign paper that will have no real value whatsoever. Whilst the penalty and taxes may seem onerous they will seem insignificant after the nationalization occurs. Quite simply there is no time left and I advise that you must act now to secure what you have.
He speaks to high net worth individuals. Not everyone has this much wealth. Everyone’s financial situation is different so there’s no ‘one-size-fits-all’ approach. What you can do to protect yourself depends on how much money you have and which country you live in.
a)If you have a little spare cash, convert it into gold and silver and stuff such as durable necessities and food with a long shelf life. I’ve discussed this before in
Stockpiling and in Dozens of Survival Articles from Beans Bullets Bullion and Bible.
In other words, convert cash into things you will need in the future. As well as ensuring your survival in emergencies, stuff can also be used as barter when the shit hits the fan (SHTF).
b) If you have a lot of money, make like Warren Buffet, the master of indirect exchange and buy assets that pay an income such as farmland that can be rented or rental property that generates revenue. Use that income to buy more assets. Yes, you may take a hit when the SHTF but it’s better than losing it all to the government. It’s better to have half than none.
c) If you’re Ultra rich, you don’t need my advice; you can afford to buy investment advice tailored to your individual situation.
Never put all your eggs in one basket. Spread it around by diversifying countries, safety and types of assets. Don’t buy just gold. Diversify into silver and necessities. Don’t store everything in one spot. Have several. If there’s a gun pointed at your head, give up one location. It’s better to lose one third and still have two thirds left.
And if you haven’t already read it, be aware of dangerous thinking habits that could prevent you from saving yourself by reading Beware Your Dangerous Normalcy Bias.
Stay tuned. You ain’t seen nothin’ yet.
September 8, 2013
Your comments are WELCOME!
If you like what you’ve read (or not) please “Rate This” below.
Lengthy comments may time-out before you’re finished so consider doing them in a Word doc first then copy and paste to “Leave a Reply” below.