Are Your Retirement Savings in
government took assets from its citizens for its own purposes. There are plenty of ways today that Uncle Sam can raid your retirement. Here are the three most likely... 1. Tax retirement account balances that are more than a certain level. This would be a “wealth tax” wearing plaid slacks and eating dinner at 5 p.m. Alternatively, the government might remove the tax-deferral element of certain retirement programs and make taxes due on gains earlier. The classic tin-pot dictator way of getting rid of local currency-denominated debt is to inflate it away – print currency to pay debts, and soon enough the currency won’t be worth much. 2. Require that a certain portion of retirement assets be invested in government bonds. That would create a new, guaranteed, and permanent market for Treasury securities. And if interest rates are pushed below zero – so that savers pay the government interest, rather than vice versa – all the better (for the government... not for your retirement). 3. Print more and more (and more) dollars in serialized quantitative easing programs... This is already happening in ongoing COVID-19 stimulus programs. The classic tin-pot dictator way of getting rid of local currency-denominated debt is to
inflate it away – print currency to pay debts, and soon enough the currency won’t be worth much. (I carry the bill in the photo above in my wallet, a memento from a trip to Zimbabwe several years ago.) That’s not dissimilar to what’s happening in the U.S. now. What can you do to protect yourself? One option is to go Greek, as explained by none other than the Social Security Administration... For the ancient Greeks, economic security took the form of olive oil in amphorae. Olive oil was very nutritious and could be stored for relatively long periods. To provide for themselves in times of need, the Greeks stockpiled olive oil and this was their form of economic security. An olive oil 401(k) might have worked as a Plan Z a few thousand years ago. But retirement needs – Botox visits, cryogenic freezing payments, Chardonnay-of-the- Month Club subscriptions – are a lot more diverse today. But the Greeks had the right idea by going analog: In a world where it takes just a few keystrokes to turn what’s yours into something that’s theirs, one way to protect yourself is to convert at least a portion of your retirement savings into real assets.
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September 2020
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