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Thursday, March 28, 2013

This is why you won't have time

A lot of people are assuming that they'll have sufficient warning of the next stage in the banking crisis to act to protect their savings, their pension funds, and their investments.  But the recent events suggest you won't, because as the following chart from Zerohedge makes clear, those who are managing the crises are very good at keeping things under wraps until they've gotten their own money out of danger, which requires making sure that everyone else is still doing business as usual.  After all, the markets cannot be exited without the greater fools to be left holding the bag.

In looking at this chart of depositor outflows, remember that the news of the imminent banking collapse and subsequent deposit heists were a complete shock to most people earlier this month.  But not, quite clearly, everyone.

The suggestions were right out in public a month before. "There have also been suggestions that private depositors with investments of more than 100,000 euros should be obliged to endure a "haircut"." -   BBC, Feb 15, 2013

But they won't be sufficient to inspire most people to action, given that the suggestions will be viewed as nothing more than remote possibilities until they actually happen.

Labels:

89 Comments:

Anonymous JartStar March 28, 2013 1:13 PM  

Since they are already telegraphing this in Spain and Italy I suppose we must assume it will become a reality.

Anonymous Freestater March 28, 2013 1:13 PM  

Of course everyone will think this is a healthy pullback. Buy the Dips!

Anonymous DT March 28, 2013 1:34 PM  

Vox - this kind of talk does nothing to ignite the animal spirits! Why do you hate the economy and the children Vox? Why?

Blogger James Dixon March 28, 2013 1:49 PM  

> Since they are already telegraphing this in Spain and Italy I suppose we must assume it will become a reality.

That's pretty much a given. The question for most of us is how long before it comes to the US, and what form it will take here.

Anonymous Salt March 28, 2013 2:00 PM  

@JartStar

Not so sure about Spain, but you can bet Italy will happen when it is supposed to. Mussolini did make the trains run on time.

Blogger James Dixon March 28, 2013 2:07 PM  

It's going to be difficult when things do go south here.

The likely events are: Government bonds will simply be repudiated. Corporate bonds (the ones that are still honored) will tank as a result. Bank accounts, 401K's, and IRA's will be raided. And stocks will tank along with bonds, though perhaps not as much.

For the dollar, it could either plummet in value or go up (see the ongoing debate between Nate and Vox). A new currency is a distinct possibility.

Gold and silver could be seized again, though with a lot more difficulty than last time.

Small businesses are already under siege and property taxes are going up significantly, so there really is no safe harbor left.

But the S&P 500 broke it's old high today, so what do people care?

Blogger FALPhil March 28, 2013 2:12 PM  

In fact, they are trying to lull the middle claqss into complacency as I point out in my blog on March 26:

"The plan 'is an exceptional and unique case, which has been exceptionally applied to Cyprus,' Spanish Prime Minister Mariano Rajoy told a press conference at the Elysee presidential palace."

The super-rich and banksters scratch each others' backs.

Anonymous aviendha March 28, 2013 2:16 PM  

But you are informed and already prepared right?
No one here has tons of cash in a bank account that pays .1% interest waiting for the confiscation right?

Anonymous JartStar March 28, 2013 2:21 PM  

Gold and silver could be seized again, though with a lot more difficulty than last time.

They probably won't bother to physically take it, just tax it at an extremely high rate if you try to cash it in. Of course that means that smaller sales will be off the books, but good luck converting $20,000 worth of gold into a vehicle at a dealer.

Even Marc Faber says he expects to lose 20-30% so I'd expect to lose at least that regardless of effort on my part. It's about mitigating the losses, not taking zero losses.

Anonymous sprach von Teufelshunden March 28, 2013 2:27 PM  

The film 2012 with John Cusack was good Hollywood entertainment. Earth changes would probably never happen as fast as depicted. However, the following dialog is most apt to this discussion:

Kate Curtis: What are you talking about? We're gonna do our regular Saturday. Noah has music at 2 and Lil has karate.
Gordon Silberman: Not gonna expect him to remember.
Jackson Curtis: Kate, California is going down! Pack up the kids now!
Kate Curtis: They just got back. God, you sound like a cray person. The Governor just said we're fine.
Jackson Curtis: The guy's an actor! He's reading a script! When they tell you not to panic...
[makes a hard left]
Jackson Curtis: that's when you run!
Kate Curtis: Look, will you call me back when you calm down?
[hangs up phone]
Lilly Curtis: Mommy, why is Daddy so crazy?
[Gordon looks at Kate]
Kate Curtis: Finish your pancakes, Al Capone.


Even Marc Faber says that gold is not enough. I say, the sooner we can hit that reset button, the better for your children and grandchildren. The longer we take to hold off that action, the harder it is going to be for all concerned.

While I mentioned 2012, and the implications most think did not occur, people need to be reminded that most events, that is "earth changing" is much, much more in slow-motion than most realize. I would say, if you can, start investing in heating oil, wool blankets, and maybe snowplows. Like one commenter states, "I hope the NASA guy is wrong, about a mini-Maunder coming. But I doubt it." I hate to say, that I'm with him, until I can find concrete proof from another to the contrary.

Faber talks about "bubbles." It appears the Mother of ALL bubbles is about to burst...

Blogger IM2L844 March 28, 2013 2:28 PM  

It's about mitigating the losses, not taking zero losses.

Exactly! Banking/investing is a very convenient, but potentially very dangerous tool that should be used in a cautious and minimalistic way. Neither banks nor market investment vehicles should ever be thought of as secure warehouses for excess funds. I'm careful never to put myself in a seriously compromising financial position. It's always s bit of a gamble, but it wouldn't be devastating for me to have all my accounts suddenly and completely wiped out.

Anonymous Porky March 28, 2013 2:36 PM  

How is a month "not enough time"?

Anonymous Porky March 28, 2013 2:44 PM  

And they're already dropping hints about Spain and Italy. There's not going to be any "surprise".

Let's be clear about one thing - this is not about taking a few measly billion from savings accounts. That's just sporting clays for TPTB.

This is about meta-control. This is about creating a crisis and then stepping in to save the day, and in the process gaining greater control over the system.

This is about building a global economic Berlin Wall. You'll be allowed to get your things in order and stash away some goodies. You will not be allowed to leave.



Anonymous JartStar March 28, 2013 2:52 PM  

Dread, I don't know who this stewwebb.com guy is but for one appreciate the Geocities style.

Anonymous Anonymous March 28, 2013 3:08 PM  

Was speaking to someone who has a friend in the European banking world and he says that both France and Germany were printing large quantities of francs and deutschmarks six months ago, FWIW.

Anonymous John Regan March 28, 2013 3:27 PM  

Here's one way the banksters obscure the truth of their insolvency:

http://strikelawyer.wordpress.com/2013/03/28/servitude/

They can reveal the truth any time they want just by recognizing what already is. By then it will be too late for the rubes, of course.

They make it seem sudden. But it isn't.

Blogger swiftfoxmark2 March 28, 2013 3:28 PM  

So what should we do with our savings and investments then?

Anonymous Rally March 28, 2013 3:40 PM  

I disagree with Vox's headline. You have time (unless you're in Cypress) and the time to act is now. How much clearer a sign do you need? Better act fast though.

Anonymous pc geek March 28, 2013 3:46 PM  

@Rally - sure...act - but act how?

Anonymous Porky March 28, 2013 3:53 PM  

So what should we do with our savings and investments then?

Prov. 3:14-24

Anonymous Andrew March 28, 2013 3:57 PM  

Vox, I love to travel. I have been following the financial news daily, as many are, and understand that in the near future there are going to be government actions that are repressive and dangerous with regards to peoples hard earned money.

My question, is do you think these actions will spill over to restrictions on travel? Do you think traveling will be made more difficult in the near term future? Even for those with clean records and the funds to do so?

Anonymous scoobius dubious March 28, 2013 4:02 PM  

What is worth more -- a great big pile of yellow metal, or a thousand acres of fertile land in California? What can you actually do with the yellow metal? What can you actually do with the thousand acres? Well, it sort of depends, duzzint it.

Let me be more precise, I supppose... which is worth more: a great big pile of expensive yellow metal, the value of which is mutually understood and agreed upon by intelligent white people all over the world, or... a thousand acres of fertile land in California, which unhappily is infested by annoying Latinos whom you can't get rid of, and who will charge you endlessly for their endless greasy ninos at any chance they get, and which can be randomly taxed and expropriated by the hostile Jews who hold all the government offices at the moment?

Okay, but again... what if you had the thousand acres instead of the gold, but you figured out some plausible way to toss the hostile annoying Jews into the Pacific Ocean and told the irritating Latinos to get stuffed? THEN what is the differential value of the pile of shiny yellow metal, and the thousand acres of fertile land?

NOW do you understand how value is calculated?

Blogger James Dixon March 28, 2013 4:03 PM  

> ... but act how?

One: Do you have enough land to grow your own food if needed?
Two: Do you have skills which will be useful in the event of a collapse?
Three: Do you have 30-60 days of cash on hand?
Four: Do you have guns and ammo on hand?
Five: Do you have some gold and silver stashed away?
Six: Are the rest of your investments diversified to the maximum extent you can do so?
And possibly 7: Are you ready to leave the country if required?

I still have some work to do on a few of the above.

Anonymous Mina March 28, 2013 4:03 PM  

The last time I got nervous about a "bank holiday" was two years ago. I went to my local branch of a pretty big regional chain with a personal check from my checking account made out to "cash" for $3000.00

I went to the teller at the window at 4pm and she almost lost her mind and actually yelled at me: "What makes you think we have that kind of cash available here at this time of the day???" she said. I looked at her and thought "Exactly." but said "I don't really care, you're the bank, figure it out."

Does not make me think that it would take much for a run to develop ...

Anonymous John Regan March 28, 2013 4:06 PM  

@Andrew, that is already underway. The USG, for example, throws obstacles in the path of renouncing citizenship.

Of course there will be restrictions on travel, and on currency (as there already has been for decades) and gold and anything else they feel like.

Maybe running away, or trying to, isn't the solution.

Anonymous JartStar March 28, 2013 4:06 PM  

So what should we do with our savings and investments then?

Slowly move a portion of savings out of the banks and into actual cash, prepper goods for 3-6 months of living, and PMs. As for your retirement accounts... I don't know. Cashing out now is such a massive hit in taxes that you'd have to assume 50%+ confiscation to make it worth it. Then once you get it out what do you do with it? So it's not an easy answer. Don't do anything rash, remember there's a tax on money out of a 401k based on your tax bracket, +10% penalty, plus losing untaxed gains is a huge loss, and if they take 20% later on when your bank fails then you've really pooched it.

Nobody really knows so I still say try to be diversified as much as possible and be ready for losses.



Anonymous Jack Amok March 28, 2013 4:08 PM  

sure...act - but act how?

Invest in rope factories? We may need an awful lot of it...

Alternately, you can invest in productive capacity. Sure, sure, they'll try to take it. They'll try to take everything they can, but you want to make it difficult for them to take.

Two things make it difficult for them to take something: dispersion and productivity.

Dispersion makes it hard because it takes more effort to find and collect. That's why investments in big businesses are a bad, bad idea - to easy to find the big business and produce the right combination of carrot and stick to get the guy running it to hand it all over. A big factory = big target. A shop out back? Harder.

Productive makes it harder to take as well, because in a little while civilization is going to be desperate for every ounce of productivity it can find. If you are a productive member of the local community - meaning if you are providing goods and services to your neighbors that they value and perhaps desperately need, you will have far more allies willing to face down the confiscators than if you are a leech or layout with nothing but PoMo lectures to offer your neighbors.

The town I grew up in had an incident in the 1880's where a pair of Chinese gangs accidentally killed a city councilmen during a shootout with each other. Every chinaman in the county was rounded up and put on a boat for San Francisco. Except for one. He was the cook at a logging camp out in the woods. The posse went out to get him, but the lumberjacks sent the posse packing. They weren't going to give up their cook.

I'd say invest your resources in machinery, supplies, and skill. Nate suggested MIG welding a while back. A welder, a diesel generator to run it, metal stock to fab with, a biodiesel still, gas tanks...

Don't forget to invest in precious metals too. Lead and brass.

Oh, don't you just love Progressive Utopias?

Anonymous ODG March 28, 2013 4:09 PM  

@JartStar,
Assume 100% confiscation. Then they will put you on Social Security with everyone else.
"But SS will be bankrupt!"
Yep.

Anonymous Jack Amok March 28, 2013 4:18 PM  

My question, is do you think these actions will spill over to restrictions on travel? Do you think traveling will be made more difficult in the near term future? Even for those with clean records and the funds to do so?

How easy do you suppose travel was during WWII? Hell, even if there aren't official restrictions, travel is a bit problematic when large numbers of people are shooting at each other. There were no travel restrictions in place between the US and UK in 1915, but passengers on the Lusitania were killed trying to travel.

And frankly, the odds are your own country may be a bit too preoccupied with cascading problems to do much protesting if angry locals in some vacation spot decide to kill you for your sunglasses.

I've never seen the pyramids of Egypt. I'm not expecting to at this point.

Anonymous realmatt March 28, 2013 4:20 PM  

People who talk about gold not being the be all end all and its fluctuating price dont understand the point. They deserve the coming horrors.

Anonymous JartStar March 28, 2013 4:24 PM  

@ODG

Then you have to assume the worst of every asset class: 90%+ loss in equities, corporate and government bonds have near zero value, gold is taxed at 80%+ on redemption, 50%+ of savings is confiscated with draconian capital controls, etc.

Your scenario is approaching Fallout 4. You may be right.

Anonymous jack March 28, 2013 4:31 PM  

@ James Dixon: Maybe running away, or trying to, isn't the solution.

Exactly! We worked hard for our little semi-homestead. We have no interest in leaving the country or bugging out. If they want it then bring it on. We may not win but there will be what I hope is a bunch of the bad guys pushing up daisy's.

I like some of the other suggestions as to diversification and having skills and the means to implement those skills. It would be nice if a crystal ball could point out the best skill set to have other than some of the obvious.

Blogger James Dixon March 28, 2013 4:34 PM  

90%+ loss in equities, corporate and government bonds have near zero value, gold is taxed at 80%+ on redemption, 50%+ of savings is confiscated with draconian capital controls, etc.

I expect government bonds to go to zero. Corporate bonds will hopefully retain some value, but will lose at least 50%, possibly far more. If the trading system stays intact, I don't expect all equities to lose 90+%, but many could. I would expect at least a 50% drop, more likely 70%. Gold will be taxed or confiscated. And some savings confiscations seems almost certain at this point, but how much is uncertain.

Anonymous Beau March 28, 2013 4:36 PM  

Are we left without counsel upon this earth? Surely not.

Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. but store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. Matthew 6:19-20

Doesn't God warn us? Surely He does.

Now as He drew near, He saw the city and wept over it, saying, “If you had known, even you, especially in this your day, the things that make for your peace! But now they are hidden from your eyes. For days will come upon you when your enemies will build an embankment around you, surround you and close you in on every side, and level you, and your children within you, to the ground; and they will not leave in you one stone upon another, because you did not know the time of your visitation." Luke 19:41-44

Are we left alone like everyone else to face the coming tsunami? No.

Behold, the eye of the Lord is on those who fear him,
on those who hope in his steadfast love,
that he may deliver their soul from death
and keep them alive in famine. Psalm 33:18-19

But what if we are singled out for persecution, or just suffer along with the rest?

If this be so, our God whom we serve is able to deliver us from the burning fiery furnace, and he will deliver us out of your hand, O king. But if not, be it known to you, O king, that we will not serve your gods or worship the golden image that you have set up.” Daniel 3:17-18

What causes Christian fear? What are those things that make for peace in our hour of visitation?

And do not fear those who kill the body but cannot kill the soul. Rather fear him who can destroy both soul and body in hell. Are not two sparrows sold for a penny? And not one of them will fall to the ground apart from your Father. but even the hairs of your head are all numbered. Fear not, therefore; you are of more value than many sparrows. So everyone who acknowledges me before men, I also will acknowledge before my Father who is in heaven, but whoever denies me before men, I also will deny before my Father who is in heaven.

Matthew 10:28-32

I don't know that day or hour of my Master's return. I know the world is troubled today. Taking comfort and strength in his return, today, the Spirit of the Lord is upon me. He sends me to preach the Good News of great joy, of redemption in his blood, of forgiveness, adoption and eternal life. Today, he sends me to clothe the naked, shelter the homeless, visit the sick and prisoners. Today is the day of my visitation and I must be about my Master's business.

Blogger James Dixon March 28, 2013 4:37 PM  

> @ James Dixon: Maybe running away, or trying to, isn't the solution.

That wasn't me, Jack. But I agree that it isn't for most people. I'd like to be one of the ones for whom it is possible, but that doesn't seem likely at this point.

Anonymous JartStar March 28, 2013 4:42 PM  

I expect government bonds to go to zero. Corporate bonds will hopefully retain some value, but will lose at least 50%, possibly far more. If the trading system stays intact, I don't expect all equities to lose 90+%, but many could. I would expect at least a 50% drop, more likely 70%.

Yep. If corporate bonds go to zero then there is no functional, modern, economy and the missiles are likely flying.

Anonymous Anonymous March 28, 2013 4:44 PM  

Bush Knew!

Blogger James Dixon March 28, 2013 4:44 PM  

> It would be nice if a crystal ball could point out the best skill set to have other than some of the obvious.

Depends entirely on the level of collapse. :(

Worst case: farming and manual labor will still be needed. Blacksmithing and other such skills may come back into demand. I'd recommend having the Foxfire books on hand.

Mid case: Mechanic, electrician, plumbing, etc.

Best case: Largely the same productive skill sets as in demand now.

Anonymous Jack Amok March 28, 2013 4:45 PM  

People who talk about gold not being the be all end all and its fluctuating price dont understand the point. They deserve the coming horrors.

Your comment is self-contradictory. Gold is only useful as an investment if a functional society remains to value it and provide security for people holding it. If things do get to "horrors" status, gold will not be particularly useful to hold. It will become a target for plunder and provide limited ability to buy necessary resources.

In fact, the plunder angle should be sobering to all gold bugs. Gold will be a successful investment in a relatively narrow range of outcomes. On either side of that narrow range, gold will be subject to plunder (by the government on this side of it, by the banditti on the Fallout 4 side). Gold is good if the government-bankster axis destroys the cash economy and then partially collapses, recovering with enough power to oppose banditti but not enough power to confiscate whatever remaining wealth is in private hands.

Granted, that narrow range has something going for it - there will be a strong impetus once the collapse starts to arrest it before the Fallout 4 level is reached. But there will also be an impetus from other quarters to exploit the collapse for all it's worth.

Anonymous Sigyn March 28, 2013 4:52 PM  

Thank you, Beau. It's important to keep that in mind as things circle the drain.

Anonymous Salt March 28, 2013 4:59 PM  

@Jack Amok

It will become a target for plunder and provide limited ability to buy necessary resources.

Even by your metric, limited ability is better than no ability at all.

Barbarians will plunder you for your food too.

Anonymous sprach von Teufelshunden March 28, 2013 5:01 PM  

@JartStar March 28, 2013 2:52 PM

For the link you posted, if you click on the very top URL, you will find a whole new style. Complete with discussion forum to ask the "horse's mouth," just who he is... (besides a USMC veteran, and probably the premier federal whistleblower, who was one-time, actually and truly "married to the mob.")

Further down, on that page you linked, click on the Webb/Duff talks. I simply love Duff. Who else can one take the time with someone, who will give you cooking tips, simultaneously with giving one "end of the world advice," while you actually hear him assembling an AR-15 in the background? I know of no other such person.

Duff is quite the cool character (I would say, that is required of one being associated with MAJIC). Webb is a bit more animated. But, the guy also did some prison time, (for trumped up charges). Duff being the guy that could literally bail Webb out, and about a dozen other guys at the same time. Mike Harris, concluding the trio, the guy that adds a dimension of sanity to Duff and Webb, for their respective eccentricies... (who is also capable of bailing out about a dozen Stew Webbs)

Anonymous Jack Amok March 28, 2013 5:01 PM  

But Salt, will your neighbors defend you for your gold? They just might defend you for your ability to feed them.

In bad times, friends matter, and gold can only buy friends in good times. In bad times, they'll just kill you and take it.

Blogger Laramie Hirsch March 28, 2013 5:03 PM  

If only my place of employment did not only send me my paychecks to the bank.

Then, I might have a better chance of dealing with this.

Anonymous jf March 28, 2013 5:12 PM  

So... should one take the tax/penalty hit and get out of a 403b/401k? And if so, what do you guys recommend putting the money into?

Anonymous sprach von Teufelshunden March 28, 2013 5:12 PM  

@Beau March 28, 2013 4:36 PM

This is going a bit OT:, but for Beau et al, for your own private consumption, and possible later more relevant discussions, I would like to turn you all on to Mr. Rob Skiba... (what I call an up-and-coming George Lucas type, with a theology degree)

Blogger James Dixon March 28, 2013 5:20 PM  

> So... should one take the tax/penalty hit and get out of a 403b/401k?

Would I? No. Others here probably disagree.

The hit I would take would be greater than any likely confiscation losses unless they decide to take the whole thing.

You might wish to move your future 401K contributions to after tax so you can pull them out without any penalty though. You would still get the company match. Check with your HR person to see how long you have to leave them in to keep the company match.

> And if so, what do you guys recommend putting the money into?

Ah, there's the rub. There is no guaranteed safe place to put it. :(

Anonymous JartStar March 28, 2013 5:32 PM  

So... should one take the tax/penalty hit and get out of a 403b/401k? And if so, what do you guys recommend putting the money into?

I recommend against this as well as the hit will be 40-50% right off the top, plus you are taking opportunity loss as well. If you are really nervous about it just contribute to the employer match and invest everything else on your own. I'd stay away from IRAs completely if you are that nervous. In taxable accounts a municipal bond fund will have approximately the same return as equities over the long term as taxes eat you up in equities. Another option is a tax managed fund in your taxable accounts like this one.

Keep in mind there's no magic bullet and regardless of what you do you will take some losses.



Anonymous ODG March 28, 2013 5:34 PM  

@Beau:

Thank you.


@James Dixon:

If you leave money in a 401k, you will ride the coming market collapse, and then the government will take what you have left, or at minimum control where you can put it. If you take it out now, you take it out near the high, and you get to keep what they let you keep. Bottom line: you get to keep a lot more if you pull it now.

Anonymous ODG March 28, 2013 6:10 PM  

Where I work, you only have the choice of equities and cash. There is no other place to ride out what's coming. I suppose if someone had a crystal ball, they could pick which equities would ride it out better, but I don't think any 401k players are going to make money in the 5-10 year range (or 2 year, if Nate is right with his 2015 prediction).
So you are left with converting to cash to ride out the storm, and hoping you can pull it out just before the government nationalizes it all. I'm not that good at timing things, so why not pull it out now while you can?

This is how I see it playing out:
The markets are going to tank, pulling everyone's 401k down with it. With no retirement, the boomers and stragglers will cry out "Save me big brother, from my now unfunded retirement!". So Uncle Sam steps in and takes control of all the money to "guarantee" a "living retirement" for everyone. Then, of course, kills them all off with Obamacare.

Clean. Neat. Simple...for them.

Anonymous VD March 28, 2013 7:00 PM  

My question, is do you think these actions will spill over to restrictions on travel? Do you think traveling will be made more difficult in the near term future? Even for those with clean records and the funds to do so?

Yes. Yes. Yes.

Anonymous Salt March 28, 2013 7:21 PM  

@ Jack Amok

In bad times, friends matter, and gold can only buy friends in good times. In bad times, they'll just kill you and take it.

Or not. Why so pessimistic? You might off your neighbors first.

/s

Blogger James Dixon March 28, 2013 7:49 PM  

> In taxable accounts a municipal bond fund will have approximately the same return as equities over the long term as taxes eat you up in equities.

Eh? Only if you sell the equities and incur capital gains. If you're actively trading the account, then yes. But as far as I'm aware, if you're buying index funds or beaten down dividend paying stocks you don't plan to sell, that's not historically been the case.

> If you leave money in a 401k, you will ride the coming market collapse...

Which will come whether the money is in a 401K or not.

> ...and then the government will take what you have left, or at minimum control where you can put it.

Maybe, maybe not. They may only add an extra tax on withdrawals. They may only add a transaction tax. They may only confiscate a portion. We have no idea what's coming at this point, or what the timeline will be.

> The markets are going to tank, pulling everyone's 401k down with it.

That's a given. They always do, eventually. The market sold off something on the order of 50% in both 2000 and 2008. I expect even more in the next one. In the depression, stocks lost something like 90% of their value. That's probably the worst case scenario unless we're looking at TEOTWAWKI (Fallout 4, above). You shouldn't have money in equities unless you think you can take those kind of losses.

Blogger James Dixon March 28, 2013 7:52 PM  

I should also note that for those who feel they can't pull the money out of their 401K due to penalties and taxes, but would like to get some of it out anyway, they may have the option of borrowing up to 50% of their 401K value and paying it back over a period of 5 years or so. If you can afford the payments, that might be an option. If the markets do collapse, you'd be buying back in at much lower values, and if the government does seize the accounts, there will be that much less to seize.

Anonymous Cinco March 28, 2013 8:11 PM  

@Salt

Barbarians will plunder for much less than food.

In the event of a total collapse, gold will probably be worth as much as dirt (initially). Bullets and food will be the big movers.

Anonymous Geoff March 28, 2013 8:26 PM  

To all considering buying gold and/or silver, one note from the peanut gallery:

pay cash, no receipt at the coin show or coin shop.


P.S. Second note: www.fisch.co.za worth more than you can imagine if you expect to exchange coins for something else later, or buy more. Lot of fake crap out there, boys.

Anonymous Will Best March 28, 2013 8:29 PM  

I think you can use some reason here. The penalty is 10%. Unless you are talking about total economic collapse the "haircut" won't be more than 10% on 401k sub $100,000.

You can do the borrow payback of the lesser of 50k or 50%. It costs you about $50-200 a year to do that plus a couple hundred to imitate the loan, then plus/minus whatever the market return gain/loss is.

In the US they are much more likely to inflate than haircut. Inflation wasn't an option for Cyprus. Inflation also allows them to more finely tune which politically unflavored class is hardest hit.

Anonymous Mr. Pea March 28, 2013 9:04 PM  

Maybe this will offer some insight as to what you can look forward to for a few when the shtf...

http://shtfschool.com/

Anonymous The other skeptic March 28, 2013 9:11 PM  

And some are predicting A new ice age starting in 2014.

That would not be nice.

Blogger Billy Brown March 28, 2013 9:44 PM  

All you folks worrying about confiscations really need to stop and thing about this from the politician's point of view for a minute. The US has different forces at play than the EU, so the collapse isn't going to follow the same pattern in both places.

In the EU the key decisions are being made by unelected bureaucrats, so they don't especially care how unpopular a measure is with the electorate. But in the US it's going to be Congress and the President explaining their latest crazy scheme to the public, and they're always running for re-election.

So, pretend you're a Congresscritter looking for a few trillion $$ to shore up the budget. If you confiscate bank deposits you piss off 98% of the electorate, because everyone has one of those. Raid pension funds and maybe 60% of voters get mad - still not good. Confiscate from the rich? But that includes congress and their lobbyists. You don't want to steal from yourself, do you?

The easy option is inflation. Fed independence was established by congress, and a simple majority can repeal it anytime they want, so if congress wants to print money and pretend everything is ok they can. Alternatively they can issue bonds at artificially low yields and require pension funds to buy them, or invent other mandatory-'investment' schemes, or even raise taxes on unpopular groups. But they have to maintain a layer of plausible deniability between the voters and their actions, because otherwise they're all going to be out of a job in short order.

Blogger Nate March 28, 2013 9:47 PM  

Boys... you've been warned. Even in America... it could all apart at any time.

Including tomorrow.

Do you understand?

Get. Out. of. The. Banking. System.

NOW.

Anonymous The other skeptic March 28, 2013 10:04 PM  

Boys... you've been warned. Even in America... it could all apart at any time.

Including tomorrow.


If it is happening tomorrow, it is too late, although we could pull some more money out of the ATMs, I guess.


Do you understand?

Get. Out. of. The. Banking. System.

NOW.


Yes, I think the writing is on the wall. Turn it into brass, lead, copper and dispensing tools, along with food.

Anonymous Porky March 28, 2013 10:14 PM  

So, pretend you're a Congresscritter looking for a few trillion $$ to shore up the budget.

They don't care about shoring up the budget.

If you confiscate bank deposits you piss off 98% of the electorate

They don't care about pissing off the electorate.

Confiscate from the rich? But that includes congress and their lobbyists.

No it doesn't. They'll make it up on the back end. And they don't care anyway.

The easy option is inflation.

Yeah. Other countries might care though.

But they have to maintain a layer of plausible deniability between the voters and their actions, because otherwise they're all going to be out of a job in short order.

Hasn't stopped them so far. Because...THEY DON'T CARE.

This is about power, not balancing the budget or confiscating a few pennies. You can't very well be a feudal lord without lots and lots of serfs.

Anonymous JartStar March 28, 2013 10:17 PM  

In the depression, stocks lost something like 90% of their value.

Exactly and my time frame is 30+ years for equities. If they are still down in 30 years we are likely in Fallout 4.

I think you can use some reason here. The penalty is 10%. Unless you are talking about total economic collapse the "haircut" won't be more than 10% on 401k sub $100,000.

Even at 20%-50% you still come out ahead leaving it in as you likely get a company match, it reduces your current tax rate, and your gains are tax free until withdrawal. I think the break point is about 70% confiscation. If it goes that high then you've lost out even accounting for opportunity cost, capital gains, and taxes.

That's assuming that you get to keep 100% of the money you take out after penalties and it isn't confiscated later in another form.

Anonymous Vidad March 28, 2013 10:23 PM  

Jim Sinclair weighs in again:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/29_The_Most_Dangerous_%26_Potentially_Fatal_Gamble_In_History.html

Anonymous The other skeptic March 28, 2013 10:39 PM  

The most dangerous gamble in history?

Ask the dead from WW1, WWII, the Korean War and Vietnam if they agree.

Blogger James Dixon March 28, 2013 11:10 PM  

> Exactly Exactly and my time frame is 30+ years for equities. If they are still down in 30 years we are likely in Fallout 4.


Pretty much yeah. If your time frame is anything over 20 years, you should be fine barring TEOTWAWKI. In most cases, even 10 years is enough.

> Even at 20%-50% you still come out ahead leaving it in as you likely get a company match, it reduces your current tax rate, and your gains are tax free until withdrawal.

As long as the current rules are in place and honored, I agree. That's a big caveat, however.

Anonymous Dr. Doom March 28, 2013 11:25 PM  

The Dow and S&P 500 hit record levels recently. Unfortunately, the media is accepting the inflation numbers of the GAO which are all a bunch of lies!
I don't know if any of you have noticed, but the price of nearly everything has more than doubled since W left, and Magic Negro came into office. That means that the 14500 Dow would be about 7000 four years ago! Same thing with S&P, divide by 2 and subtract around 5%. The Market has already crashed! People don't realize it because of inflation!
However, I expect that this charade of Market Stability to last only as long as Quantitative Easing continues to drive up real prices. The Federal Reserve cannot continue to do this much longer. Other nations like China and Russia have lost faith in the Dollar, and further inflation is only going to make countries like Saudi Arabia, Iraq and other OPEC nations to stop using the Dollar as the World's Reserve Currency. When and if that happens, even Quantitative Easing is not going to save this Administration, because the value of the Dollar will necessarily plummet and Hyperinflation will occur.
You shouldn't worry as much about a Cyprus situation than Hyperinflation. If Hyperinflation occurs, the Stock Market will zero out, and the banksters' fortunes are going to be wiped out. Hard currency like Gold and Silver, or preferably diamonds because their small and easy to carry/hide, is only going to be useful if you can safely leave the country to Canada or Europe.
All the banks are going to run out of money, and the SNAP benefit cards of the permanent underclass is going to stop working. Think Zombie Apocalypse at that point! If you're still in the country on the Day the EBT card stops working, you better bug out to the exurbs or the woods, because otherwise you're going to need lots of supplies and ammo to survive near urban centers! Looting and Killing on a scale never before seen, and a Yugoslavia-type ethnic Civil War will quickly break out as all the hate the media has been promoting is going to EXPLODE!

Anonymous The other skeptic March 28, 2013 11:48 PM  

I wish that ammo prices would come down. A dollar per round plus tax for 45 ACP JHP is just too much. Still, I got some to see how well it feeds.

Anonymous The other skeptic March 28, 2013 11:58 PM  

All the banks are going to run out of money, and the SNAP benefit cards of the permanent underclass is going to stop working. Think Zombie Apocalypse at that point!

In a SHTF situation the SNAP using class are going to die. The people you have to worry about are those who are more resourceful among the NAMs.

Of course, if you live in a city, like, say, San Francisco, you are likely to die along with the fudge packers unless you can get out quickly.

Blogger LP 999/Eliza March 29, 2013 12:12 AM  

Charttastic, true indeed, many people won't have the time, presence of mind or maybe courage/common sense to interpret the current situation for what it is.

We will see how the SNAP issue goes as that is managed by jp morg.

OT: that unnamed org is going to correct the issue, they did end up wanting to speak to my bank. The issue won't be addressed until maybe Tuesday due to Easter/vacyas. I'm not bothered, just learning lessons. I was already in saving/not buying routine si its not that painful. Sadly, savings doesn't work with the cost of living, saving, while a great idea is easier said than done.

Blogger The Observer March 29, 2013 12:34 AM  

The confiscations seem set to spread to Canada:

http://theeconomiccollapseblog.com/archives/cyprus-style-bank-account-confiscation-is-in-the-new-canadian-government-budget

"The Government proposes to implement a "bail-in" regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants.

So if the banks take extreme risks with their money and lose, "certain bank liabilities" (i.e. deposits) will rapidly be converted into "regulatory capital" and the banks will be saved.

In other words, the banks will just be allowed to grab money directly out of your bank accounts to recapitalize themselves."

Anonymous Jack Amok March 29, 2013 2:19 AM  

A dollar per round plus tax for 45 ACP JHP is just too much. Still, I got some to see how well it feeds.

What are you dorking around with JHP for? FMJ is less than half the price, kills just as well in that caliber, and will go through body armor better. Plus it feeds better in an M1911.

Anonymous Jack Amok March 29, 2013 2:26 AM  

I've been thinking about it, and I don't think Fallout 4 Live is the right metaphor. No, it's more like The Good, the Bad, and the Ugly. A civil war rages while Blondie, Tuco, and Angel Eyes run scams and shoot their way through the chaos. It's either that or Josey Wales where somebody just trying to get by sees his family slaughtered by one of the roving bands of soldat.

I haven't watched Leone's masterpiece for a couple of years. Might be time to watch it with the boy - he's getting old enough now. Good for him to learn that there are two kinds of men in this world, those with loaded guns, and those who dig.

Anonymous Anonymous March 29, 2013 3:19 AM  

So if a bank fails, is a checking account safer than a savings account??? I know the bank pays less interest on checking so it must be safer right??? I'm just weighing options as to rats eating my paper money at home or the rats at the bank.

Anonymous Anonymous March 29, 2013 3:33 AM  

Exhibit 1: Customer deposit outflow in Feb: -2.7%...

Vox, a negative outflow is an inflow... was it an outflow or an inflow??? 2% seems it could have been either way.

Anonymous zen0 March 29, 2013 4:52 AM  

The Observer notes: The confiscations seem set to spread to Canada:

Thanks for the link. It led me to recent budget paper by the Canadian government mentioning "bail-in", to a set of remarks by Mark Carney (Gov. BoC) discussing "bail-in" as being recommended by the Financial Stability Board (international regulatory body set up after last crisis), and also to a paper published in April 2012 by the IMF called From Bail-out to Bail-in: Mandatory Debt
Restructuring of Systemic Financial Institutions


This business has been in the works for a year. That is why it seems to be popping up all over "spontaneously".

Anonymous zen0 March 29, 2013 4:54 AM  

PS

The Carney remarks were Nov. 2012

Anonymous zen0 March 29, 2013 5:14 AM  

Warnings in the IMF paper:

Ultimately, the effectiveness of bail-in will depend on the ability of the resolution
authority to exercise its power in a manner that enhances financial stability. Individual
banks and the banking system are vulnerable to bank runs and banking panics, which can be
caused by weak fundamentals or self-fulfilling shifts in market sentiment (Diamond and
Dybvig, 1983).........Bail-in is untested in a systemic crisis ........


Goodness knows why they need to cite Diamond and
Dybvig, 1983 to state the obvious.

Blogger IM2L844 March 29, 2013 7:58 AM  

That is why it seems to be popping up all over "spontaneously".

Enough with your wild lunatic fringe social conditioning conspiracy theories. The dominoes will never fall! Cypriots should be thanking the benevolent Troika for allowing them to keep their scalps. /s

Anonymous E. PERLINE March 29, 2013 9:34 AM  

I've seen the tail end of the great depression but I suppose there's always a worse case scenario. All I can say is If you have a trade, gather the stuff to run your own business. If you know office work, be ready to provide service directly to the public. If you know a bit about farming, accumulate some arable land.

A while back I've bought apartments and rent them out on the supposition that most people need a roof over their heads. Let the apartments be of the cheapest kind. And it's better if you are not beholden to any bank with a mortgage.

It's a shame that when our our productive capacity is constantly improving, we have economic uncertainty. Maybe our newest flag should say "A fine mess you got me into."

Anonymous The other skeptic March 29, 2013 10:09 AM  

What are you dorking around with JHP for? FMJ is less than half the price, kills just as well in that caliber, and will go through body armor better. Plus it feeds better in an M1911.

Just wanted to see if it would feed. I will have to watch out for it.

Anonymous The other skeptic March 29, 2013 11:00 AM  

Executive action on gun control

Anonymous Jack Amok March 29, 2013 12:19 PM  

Executive Action on gun control...

So, the great, horrible, sky-is-falling Sequester of Doom (DOOOM! I tell you!) that will destroy civilization as we know it isn't stopping Obama from ordering a million dollar anti-gun ad campaign.

Blogger James Dixon March 29, 2013 12:25 PM  

> So if a bank fails, is a checking account safer than a savings account???

No. The one advantage of a checking account is that you'll be able to write checks on it as long as they're accepted.

Blogger James Dixon March 29, 2013 12:30 PM  

> So, the great, horrible, sky-is-falling Sequester of Doom

My response to the cries about how bad the sequester is was simple: If that amount of money is so essential to the government's operation, we'll let you have it and cut the other $3 billion.

Anonymous PC Geek March 29, 2013 8:42 PM  

Maybe this will offer some insight as to what you can look forward to for a few when the shtf...

http://shtfschool.com/


Interesting site...but far more likely what we would face is an Argentinan-style collapse...the parallels leading up to it between our two countries are frightening.

Blogger JCclimber March 30, 2013 2:57 AM  

As we departed LAX to fly to Japan, the Homeland Security Gestapo suddenly descended with 12 personnel on our line of people about to board. They asked each individual (including our young son) if they were carrying more than $10,000 in cash onto the plane. (My answer? "I wish").

I had to explain to my wife what has been happening worldwide, that the government is finally starting to take action on laws enacted YEARS ago, in incremental steps. Now they are just asking. Next month they will be doing random searches. Next year, mandatory searches.

While I always opt out of the naked scanner, I notice fewer people opting out these days. The Sheeple are becoming accustomed to government agents riding roughshod over our constitutional rights.

Anonymous E. PERLINE March 31, 2013 11:48 AM  

Speaking of real estate (I was) U.S. real estate values have always been spotty. That's due to long standing populations in our country that are less productive.On the other hand, Canada has been doing rather well. Real estate prices in Vancouver are the 2nd highest in the world.

The largest immigration group entering Canada are the Chinese from the Chinese mainland. They're very productive and commit few crimes.

If we have immigrants we should at least have a mix of them. If the U.S. Immigration Department can't control it, who needs that department.

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