My wife just called me from her new place of work. Their 401K guy was in to give a presentation and talk to the employees. Basically, he is counceling them to shelter their funds from the coming market colapse.
Now, I have been following and researching our current economic situation, including trying to understand how things work and what our current situation is.
A few bullet points:
- current Gross Domestic Product (amount of business in dollars that we produce in a year) is a little more than $15Trillion
- current UNFUNDED liabilities $123Trillion
http://www.usadebtclock.com/ This is more than the world's GDP...
- Europe is on the edge of economic colapse from their unfunded liablities coming due...
- All the world's financial institutions are investing in extremely high yield but extremely risking (ponzi like) schemes.
- All the US financial institutions (banks, insurance companies, brokerage firms, credit card companies, pension fund management, etc.) are required to hold only 10% of their deposits on account. They are investing the remaining 90% in the above schemes - all of them are. But it's worse than that. Because of current accounting practices, even the 10% is invested because they don't have to show certain investment liabilities on their balance sheets. Some have already been caught and gone under - with all of their deposits going with them - MF Global - John Corzine is a good example. Billions of people's investments gone in an instant.
- Our current prime interest rate is 0.02 give or take - basically zero. The financial institutions need a "spread" in order to make money the traditional way (I am way over simplifying this but it's a topic unto itself) and so they've turned to the ponzi schemes - which have EU bonds figured in them heavily - because they are uber profitable right now. Greed.
- The stock market is ruled by computer programs that invest using parameters and algorithms that are designed to protect the investors but... when things get hot, they shut down. No trading - no buying no selling. When the market crashes, this is what will happen and all of the funds in the market will be frozen - you will not be able to bail out.
- The US dollar is the current world reserve currency. If Russia wants to buy oil from Saudi Arabia, it must first buy dollars and then pay with dollars. This is what has supported us up until this time - what has allowed the FED to print money without forcing the inflation that should follow. But this will change - overnight.
My wife wants to meet with the above 401K guy that is also a financial advisor, so I am going to do that. I am interested to hear what he thinks he has to shelter funds. Anything valued in dollars will not be protected because the dollar itself will become worthless.
We have determined that we need to pull all investments (take the 10% hit and pay the tax) and put the money into PM's. We don't have a lot but it would be something should everything go to pot and it may be much more if we experience massive inflation as the PM's will ride this wave.
Commodities in general are going to be the only safe place to shelter your worth. I am talking commodities that you physically hold. Land, grain, oil, coal, steel, copper, precious metals, etc. - things that have a long shelf life and are absolutely needed or held in high value by the world.
I am just sounding the bell again because we are now seeing financial folks openly talking about it. I've never seen this before.
They are forced to because so many people are pulling their funds! They are trying to save their business and keep their jobs. They can no longer ignore it. Fewer and fewer people believe in the market and investing in bonds, etc.
Do not be the last to decide to do this - it takes weeks if not over a month to pull your money - believe me. They do everything in their power to keep you from withdrawing!
The storm is coming. I pray that you all are prepared for it. I pray that we still have time to.
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