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With the craziness going on in Cyprus, I've been thinking about stuff like that coming here. I'm just curious as to what you think is the most likely scenario for us.

I think there will be many ideas introduced to fund the governments (city, state, fed). There seems to be a hatred of wealthy people and this is exactly what this administration is pushing. Governments can't get the wealth they need from the poor, so I guess the wealthy must be the target. I really think retirement accounts will be targeted in some way, just as the Social Security fund was raided. We are in worse shape than anyone is willing to admit.

If there is a 10% charge on bank accounts in the USA, it will bring a storm of lawsuits and will set off a bank panic. Liquidity will be drained from the system like water going out of a bath tub.
It will bring on a collapse and depression.

If the retirement accounts are seized and replaced with government bonds...you'll know the game is up. It will time to get out of the USA and we will have descended into 3rd world status. A lot of people will be VERY angry...

I don't think either one will happen here...if it does, we might have more important things to think about than money...

I agree that doing either hard core move (10% charge or seizing retirement accounts) will yield something, shall we say, "bad".

But there is no need for that. The subtle play is simply to make it "advantageous" to invest differently, say removing the IRA tax benefit going forward UNLESS you invest in the government.

And the 10% bank charge isn't necessary and is only a pittance compared to a REAL "net asset tax" done in some sort of subtle fashion. Something in the guise of a nationwide property tax for example would do a lot of it.

The Government isn't great but they know that just subtly moving is the path to THEIR prosperity and they will continue to subtly change so that not enough people complain to make them nervous.

barrytrot wrote: The subtle play is simply to make it "advantageous" to invest differently, say removing the IRA tax benefit going forward UNLESS you invest in the government . . .

The Government isn't great but they know that just subtly moving is the path to THEIR prosperity and they will continue to subtly change so that not enough people complain to make them nervous.

Exactly Barrytrot, slow and insidious is the game played.

"With the required (you fill in the blank _____)% US T-bills and Bonds in your 401K and IRA, you get continued tax benefit and the FULL Protection of the US Government!"

Small at first, increasing over time. A complete no brainer.

johnbrickner wrote:

barrytrot wrote: The subtle play is simply to make it "advantageous" to invest differently, say removing the IRA tax benefit going forward UNLESS you invest in the government . . .

The Government isn't great but they know that just subtly moving is the path to THEIR prosperity and they will continue to subtly change so that not enough people complain to make them nervous.

Exactly Barrytrot, slow and insidious is the game played.

"With the required (you fill in the blank _____)% US T-bills and Bonds in your 401K and IRA, you get continued tax benefit and the FULL Protection of the US Government!"

Small at first, increasing over time. A complete no brainer.

Interesting. I'd never thought of a "voluntary" conversion. That really would be a brilliant move. It would be a tax mainly on "the rich," who "selfishly" want to keep thier money in something other than a US debt vehicle. The more I think about it, the more accurate this scenario seems.

Barry nailed it. The fluffy kittens nailed me in an HSA with an incentive to put away pretax money while being able to buy over the counter meds, etc. A couple years later, they took away the incentive of OTC meds, and doubled the withdrawal penalty to 20%.

They're slow & sneaky...and any time you're offered a carrot, you need to pay attention to who's holding the stick.

The slow and insidious plan in place now is to take our wealth through inflation.

The way I see it, there are only two possible ways out...

A). The government mades some hard decisions. They cut back on spending, and keep doing so. Entitlements are rolled back, many programs are scaled back. Taxes probably get raised. Lots of people are going to get VERY angry.

Interest rates are going to have to RISE. Government debt is going to have to be paid and even reduced.

B). The government takes the easy way out. The easy way out is to inflate. Everybody gets paid! But your benefits don't quite go as far. Inflation is running at higher rates than as what is officially admitted.

Which method do you think the government will take? The easy way, or the hard way?

Nationalize the 401K accounts first because it's easiest. Then a "net value tax", and isn't that going to be an SOB of a 1040 to fill out. Maybe they will go after Trust Funds, but that's too close to home and their supporters use trust funds to dodge inheritance tax and income tax.

But inflation is going to be with us for a long time, and it's going to get worse.

Interesting looking at this poll post Cyprus!