Bob Chapman
The amount of money and people withdrawing from 401K’s has been staggering and Wall Street and government do not like it one bit. There are those who have been fired, run out of benefits, and half to cash in part or all of their retirement. The villainous ones are those still employed, who have taken up to three loans, many of whom have bought gold and silver with the proceeds.
That said, Senator Herb Kohl, Senator Mike Enzi have introduced legislation to limit citizens to tapping into their 401K’s, called “SEAL 401K Savings Accounts.” The bill would reduce and limit the number of loans workers may take from 401K’s and give participants more time to pay back loans after losing their jobs. In addition, employers would have the option to reduce the number of loans for their plans.
At the end of 2010, 28% of participants had loans outstanding, a record. The average loan balance was $7,860.00 and 58% of plans permit participants to have two or more loans at a time. If participants are fired or lose their jobs 70% default on their loans.
Workers generally may borrow as much as 50% of their vested account balance up to $50,000. The loan must be repaid in five years, unless the money was used to purchase a primary residence. The average interest rate is 1% over prime.
We find it of more than passing interest that Mr. Kohl is not running for reelection next year.
If you are going to borrow from your 401K’s do it now, ahead of this legislation, that could interfere with the purchase of gold and silver shares, coins and bullion. This is the main reason for this legislation, to stop you from protecting your assets. Of course, such loans involve selling holdings in the 401K’s and that puts downward pressure on stock and bond markets, or takes incoming funds destined for those markets away from those markets.
One aspect of a new and improved federal regulatory scheme is the seizure of 401(k) retirement plans and the subsequent government-administered disbursement of the funds.
In Chapter 3 of the Annual Report on the Middle Class released in February by Vice President Biden and the White House Task Force on the Middle Class, the Obama administration calls for enhancing the “retirement options” for the middle class by imposing “new regulations to improve the transparency and adequacy of 401(k) retirement savings.” [Read the entire article:
http://www.thenewamerican.com/index.php/usnews/politics/3478-obama-administration-plans-to-seize-401k-retirement-accounts [Here is your proof, as we have been telling you over and over again, get out of your 401Ks and IRAs before you have nothing more than a promise to pay from a bankrupt government. Bob]
It is difficult for observes to get the perception that very dangerous financial and economic events are just around the corner. We find up to a certain point those in power more often are able to pull another rabbit out of the hat. Not that the problems have been solved. They haven’t been solved. All of the assistance, as temporary as it may be, has gone to the world financial community and governments. We seldom hear the question why did these financial experts and governments get into such a horrible state of affairs? All we hear of is saving them and allowing them to keep two sets of books, so they can write off their losses over the next 50 years. We don’t expect you to get such a comforting arrangement. These are the same lenders that if you are late on a payment your interest rate goes from 6% to 30%. To say the least the lenders and governments are getting away with financial mayhem. We find it of great interest that the Federal Reserve and the European Central Bank find it appropriate to buy bonds known as toxic waste, those are bonds containing mortgages, and find it necessary to keep secret what they are paying lenders for these bonds syndicated several years ago. Then previously there was the matter of divulging who the Fed loaned money to during the credit crisis. It took two years to get that issue adjudicated at the appeals level. The Fed wouldn’t divulge because they said what they had done was a state secret, a position totally untenable; which the court disagreed with. The Fed just didn’t want anyone to know who they were bailing out. They were bailing out select elitist corporations not only in the US, but in foreign countries as well.
Anyone with a drop of sense knows that if official interest rates rise, or if continuing debt expansion is halted, the bottom will fall out of the US economy and the world economy with varying damage. Still about 60% of foreign reserves are held in US dollars, the world’s reserve currency. Since 1988 central banks generally speaking have been sellers of gold at the behest of the US government and the Federal Reserve in order to suppress prices and rid the world financial system of gold backing. Gold acts as a control mechanism limiting a country’s ability to create money and credit. Under neo-fascist Keynesianism the creation of money, credit and speculation was to be allowed to run rampant, as we have seen for some years. All of the profits went to the transnational conglomerates, as the losses were dumped on the public. We would call that a one-way street. The debt created from a recent historical perspective is without precedent and continues to grow in the US and in Europe. Over the next two years it is estimated that $3.6 trillion has to be rolled over plus new debt.
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