Human Nature and the GRA, Part I

Filed in 1099, Debt, deflation, earnings, Gold, New Gold, obama, silver, Spot Gold, US Dollar by on October 19, 2010 0 Comments

A very bright reader extrapolated from two very different recent articles and asked, “Linda…? Have you considered what can happen when forced GRAs are implemented and the consequences to those who refuse to play and sell out before the deadline?” Blush. No, I hadn’t; I talked about the proposed GRA swindle in one piece and the other was on home war-gaming as an investment aid . Most of you have an IRA or a 401(k) and have at least heard rumors that Congress is scheming to coerce you into rolling the funds into a Government Retirement Account filled with freshly-printed treasuries backed by the full faith and credit of the folks who brought you Social Security and Medicare. It sounds like a grand idea to appropriate somewhere between $7.5 trillion and $14.5 trillion (depending upon the estimator and where the Dow is) if you are a rapacious government official seeking whom you might devour. Is it, though, really? That is, can the ploy actually work? Bearing in mind that fewer than 8% of those associated with Mr. Obama have any business experience at all, and given that it is difficult to make most of us who are aware of danger behave to our disadvantage, let us consider two very simple scenarios covering 1. Those who geek and let the government appropriate their savings; and 2. Those who take their lumps via taxes and fines quickly and wrest what they can from the clutches of the Feds. 1. Okay, Messires Bernanke, Geithner, Reid, and Obama, suppose you have managed to claw half of all such retirement accounts from their unhappy owners. We’ll be conservative, as always, and estimate that you are now in possession of $3.5 trillion in the form of stocks, in a very hinky market. What are you going to do next? “Well, uh, we’re going to replace the stocks with government bonds, just like the non-negotiable ones in the so-called ‘Social Security Fund,’ and spend the money.” That’s nice, gentlemen. What will you do with the stocks themselves? That is, how do you plan on …

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Human Nature and the GRA, Part I

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