Work 'til you drop

Sat, Feb 1, 2014 - 4:39am

"An alarming 37% of middle class Americans believe they’ll work until they’re too sick or until they die.

Another 34% believes retirement will come at the ripe age of 80. Just two years ago only 25% of respondents felt the same way." -- Forbes, 10/25/2013

Congress, after a record-length continuous session, finally adopted a landmark bill, accomplishing comprehensive entitlement reform. The occasion was momentous, for there had at first been little hope of statesmen overcoming the years and decades of bitter partisan rancor. The bill, entitled “Retirement Reform, Debt Reduction and Retirement Account Choice Act” passed by a margin of 250 votes for, 53 against and 43 abstentions, and was signed immediately into law.

Citizens would no longer have to be at the mercy of “ruthless, opportunistic, stock-shilling and mutual-fund-pushing wealth managers”. No longer would they have to live in fear of money market accounts breaking the buck, investment funds going bankrupt. Counterparty risk would soon be a thing of the past. Social Security would henceforth maintain actual, individual accounts in all participants’ names, and would contain only the highest grade of domestic government bonds guaranteed to meet or exceed the rate of inflation.

“A comprehensive victory for progressive democracy”, declared the Speaker.

“Senior citizens can finally rest easy, and peacefully enjoy the well-deserved rest of retirement without fear of losses in the stock market, or the bursting of economic bubbles such as real estate or dot-com.”*

After the passage of the bill on December 13th**, citizens have to actively submit a petition to the Social Security Administration that they wish to RETAIN their employee-sponsored 401(k), retirement fund, pension fund or other tax-deferred employment-related retirement savings account -- by the deadline of January 31st. All accounts for which such petitions are not submitted will be liquidated, and their balances debited into the Social Security Trust.

Those who choose to retain their non-SSA accounts may do so. However, they will thereby be disqualified from further participation in the Social Security system, eventual payments upon retirement would be calculated based on years worked prior to passage of the bill. They will, of course, still be subject to PAY the Social Security tax on any and all earnings. For the interim period, while the individualized SSA accounts are being set up, the retirement contributions to ALL retirement accounts will be fixed at 10% of gross wages, and will be collected by the SSA for the next 12 months.***

Sounds like a good deal, don’t it? No need to worry about which mutual fund to pick. No headaches about whether you can buy HUI or short bonds. No need to worry your pretty little head about anything, your friendly benevolent government will take care of EVERYTHING for you. It’s Guaranteed by the Government ™. And of course, for those who so choose, individual IRAs and Roth IRAs are still available. For now…

*- quotes from politicians may have been dramatized recreation of the original

**- 2010

***- or until individualized SSA accounts are established and operational, whichever comes later. The individualized Social Security Savings Accounts are still „under construction”, pending „data harmonization”. So the Treasury automatically collects ALL retirement contributions deducted from gross wages. It's keeping those funds safe since January of 2011....In the general budget.

The situation described above, has not (as yet) taken place in the US, but it is very real. It is the reason my mother (and anyone with half a brain in her generation or younger) realizes that there is no reasonable expectation of an actual pension or social security payment for ANYONE in certain countries.

The details described above (though the quotes are fictitious) are from the Hungary of 2010, and the upstanding leader who made all this possible was this guy (yes, he too had a stint as community organizer at one point, and is another one of those lawyers giving the legal profession a bad name):

(EDIT: more famous youthful portrait added for reference and comparison. Perhaps there is a lesson to be learned here regarding fascination with straw hats, demagoguery, smoking implements, narcissism, oral fixation and political success.)

The example appears ’contagious’ – after this pair pulled it off in Argentina in 2008:

The Poles apparently caved and followed suit late last year. Whether the current Prime Minister was in any way influenced by the sudden death of the previous president (and a large group of senior government officials incl. central bank chairman) in a tragic plane crash on approach to Russia will perhaps never be known. That was most assuredly just that, a tragic accident. But the fact remains that Mr. Tusk did implement a partial nationalization just a few months ago in Poland.

(EDIT: the less favorable portrayal seems to indicate that the subject is 'loyal as a dog'. Ghost in upper right is Jaruzelski, the last [openly] Communist premier of Poland)

The list is becoming quite impressive, and very rarely/lightly covered in media outside the target country.

2009: Ireland took Euro4.4bn National Pension Reserve Fund assets to bail out banks

2010: Portugal nationalised pension assets of Portugal Telecom

2010: Ireland took remaining Euro 2.5bn National Pension Reserve Fund assets

2010: France took Euro33bn from its National Reserve Pension Fund

2010: Hungary nationalised individual private pension accounts to reduce state debt

2011: Portugal confiscated pension assets of its largest banks

2012: UK took £24bn of Royal Mail pension assets and reduced current budget deficit

2013: Poland nationalised half private pension assets by confiscating bond holdings


Not to be outdone, Russia is 'temporarily seizing' private pension assets while it conducts an 'audit' and an 'inspection' to ensure that money held in these private funds is 'safe'. Supposedly there will be a 2-year transition period, during which private retirement funds must reorganize to be publicly listed stock companies. Good luck with that, guys...

For what it’s worth, the current status of the same system is very different in the US, and (presumably) other Western societies – though I have little direct experience with the Canadian, UK, German or other continental EU systems. There appears to be a stronger protection of individual property, there are broader options, the government plays a lesser (or no) role in the administration of retirement funds.

But the act of confiscation is almost NEVER called confiscation. It merely becomes punitively unprofitable to keep your savings in a non-state-mandated plan. The private plans can be legislated out of existence, and all other options besides investing them in government bonds in a government account are generally made extremely unattractive. Say, the current 10% penalty and full income tax payment upon early withdrawal is changed to a 35% penalty. Or a 50% penalty. UNLESS one rolls it over to a new-and-improved-and-expanded myRA.

After the lackluster initial participation rates, negligible deposit amounts and abject failure of the program, it will be established by a special panel that the problem is not that it lacks compelling value – the problem is that the program is not large enough, accommodative enough, subsidized enough, mandatory enough. In this aspect, I find it similar to the Afforable Care (and Patient Protection) Act – once its status as a non-starter is established, a doubling-down is far more likely than a rollback.

Dodging healthcare coverage will be akin to skipping out on child support or state tax payments (anyone else notice state treasuries becoming DESPERATE in recent months/years to whack current and especially past residents with claims of unpaid back taxes?). A lack of contribution to a retirement savings plan can be similarly cast in a negative light. Proposals praising the economies of scale that could be achieved by merging pension systems into a single, massive, Treasury-administered and guaranteed structure may seem like an outlandish proposal now.

But just think about what the landscape might look like as the already-underwater state- and union pension funds, as well as individual 401(k) accounts go through another elevator ride down. Last time, the S&P more than halved from the 2008 high above 1400 to 680-ish. If the index begins a near-vertical dive from the current 1800+, how low will it have to go before emergency legislation is proposed to ‘save the retirements!!!’ by converting them ALL to .gov-guaranteed accounts, and even restoring them to some balance/date combination?

Will 1200 be enough? 1000? 650?

Relying on the honesty, integrity and capability of politicians and bankers may not always be the most fruitful approach – unless one is among them, and gets to share in the spoils.

A Hard Lesson from Motown: They Will Steal Your Pension

Detroit files lawsuit seeking to void pension debt

If you have capital, try to put it to work in a productive business. Buy land, buy rent-producing real estate (or at least buy ‘rental rights’ to said real estate/land in a jurisdiction where the 'rent' of property taxes is manageable). Build a garden, a windmill, a solar array or a well. Buy a nice necklace for the wife, or bracelet for the husband. Make sure your pantry is well-stocked, toolshed equipped, armory diversified. Definitely continue your midnight gardening as well. Whatever you buy (or think you bought), never forget that possession is 9/10th of the law. And yes, that does mean physical possession.

Keep stacking. Go Seahawks.

About the Author


gold slut
Feb 1, 2014 - 5:27am

Pensions = money

After the last couple of years, I have seen my private pension pots being eaten away before my eyes, year by year. Until a few years ago, things were looking pretty good, but not so much now.

Pension funds are just too tempting to be resisted by TPTB, and these people will stop at nothing to keep things rattling along for a few more years. I realized this when they started to gouge my pensions, that is how I ended up here, and how I started stacking and taking boating lessons.

I think (introduction of MYRA in the US reinforces this thought), that by the time I retire in about 15 years, my pension payout will be more or less gone.

They can take it from you and they know it and they will. There will be no comeback for them and they know that also. I can protect my Phyzz, but not my pension.

Just sit back everyone and watch yourselves get robbed.....

4 oz
Feb 1, 2014 - 6:23am

Yeah people think

Yeah people think they are going to work till they die....


So, who says anybody is going to have work for peeps in the 'way up there' age demographics?? Ask yourself, 'How many people do I work with that are pushing 75? Or do I even know someone that old that's still working?'

Sure it's easy for someone to say they figure they'll have to work 'til their dying day' but that's not practical, or's pretty much a cop out....and resembles the buy now/pay later mindset that likely has 'em in trouble already.

My advice--

Buck up..and begin thinking for yourself!

Stacking is a job un-to itself....and there's lots to be said for working for yourself.

Start stacking real wealth preservation outside the banking system...start now.

Feb 1, 2014 - 7:36am

Reason Turkey got in its

Reason Turkey got in its current political problems on December 17th 2013-defying Western bankers over gold imports in 2013, with increase in December.

The country’s December 2013 imports came in at 31.65 tons, surging by 64 percent compared to the previous month. In the same month of 2012, Turkey imported 3.6 tons of gold.

Quote: urkey’s foreign trade deficit rose to $99.78 billion last year, marking an 18.7 percent rise from 2012, with the impact of record gold imports that jumped by over 150 percent over the year.

According to data announced by the Turkish Statistical Institute (TÜİK) on Jan. 31, the country’s foreign trade gap jumped by 37.3 percent to $9.92 billion in December. This marked an increase higher than market expectations, which had been around $7.9 billion for the month.

Quote: Accounting for a considerable portion of the deficit, Turkey’s gold imports last year boomed by 150 percent to reach a record level of 302.3 tons that worth $16 billion, as Ankara continued paying for Iranian natural gas and oil imports with the Turkish Lira and Tehran used deposits held in Turkey’s state-run Halkbank to buy gold.

Some of the gold was held inside Turkey at the peak of the trade while some was taken to Dubai by couriers to be sold for foreign currency, which was urgently needed by Iranassanctions have increasingly cut off access.

Feb 1, 2014 - 7:41am

Perfect recipe how individual

Perfect recipe how individual actions will accelerate debt deflation:

1) hoarding cash ( lower money velocity , out of banking system) 2) Paying down debts incl prepaying taxes ( prepaying govt debts) = smaller money supply (smaller debt incl high power money=govt debt) with increased velocity in debt repayment. Net result- smaller money supply with roughly same velocity ( if debts are repaid at same rate as cash is hoarded velocity does not change-say roughly 50% of cash is hoarded, 50% used to pay down debts, prepay taxes). The nicest and deadliest thing about debt deflation is that today there is no other choice neither for individuals nor world as whole. Some countries earlier ( West Japan) some few years later but all world is synced towards depression.
Feb 1, 2014 - 8:11am

Thanks JY!

A nice thought provoking article, thank-you.

The future is so bright, we're gonna need shades! And some place to hide our wealth

before it all just gets sucked up by by the forces of redistribution.



P.S. Top 10.

Feb 1, 2014 - 8:49am

Yep, the Myra

"But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride, or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich—will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt—and of his life, as he deserves.

"Then you will see the rise of the double standard—the men who live by force, yet count on those who live by trade to create the value of their looted money—the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law—men who use force to seize the wealth of DISARMED victims—then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

"Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion—when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: 'Account overdrawn.' -Ayn Rand

sierra skier
Feb 1, 2014 - 9:21am

I hope to retire but can I

I hope to retire but can I make it last. We have no pension, IRA, 401K or other tax deferred retirement accounts, just our long term investment in a privately held corporation and our preps.

We have what I believe is a comfortable investment and savings cushion giving a reasonable income which with SS from both of us should be more than enough to provide a decent retirement income. What with the way our financial system is going though it is frightening as to whether our investment income will continue to have enough value to pay the bills in the future. Will SS continue to be paid out and if it will provide anything of value as inflation sets in.

Only time will tell. Good read JY, Thanks

Feb 1, 2014 - 9:41am

More Youths Believe In UFOs Than Social Security - Poll

Monday, September 26, 1994 - Page updated at 12:00 AM

WASHINGTON - Young Americans have more faith in UFOs than in Social Security, says a poll released today by Third Millennium.

The nonpartisan organization started by the so-called Generation Xers said its survey tells a "chilling tale of young people convinced that the social contract between the generations has been dissolved."

According to its poll, only 9 percent of people between the ages of 18 and 34 believe Social Security will have the money to pay their retirement benefits.

Just over one-fourth say Social Security will still exist when they retire, compared with 46 percent who think that there are unidentified flying objects, or UFOs.

The poll, conducted in early September, surveyed 500 young people.

"Despite their faith in UFOs, young people know that the solution to the Social Security funding crisis - and the national-debt crisis - will not fall from the sky," says Richard Thau, Third Millennium executive director.

Indeed, a draft report by the Congressional Budget Office concludes that "no easy fixes to the funding problems of the Social Security system exist."
Feb 1, 2014 - 9:44am

Uneasy feeling

I'm "semi"-retired ( because I can't comfortably embrace saying "fully" at this point) but given the current US & world economic volatility and growth stagnation I feel like I can't count on staying retired.

I'm glad and fortunate the trade/career I chose had a defined pension plan because I realize those DPP's are increasingly becoming rarer. In the future the stability and viability of those market invested DPP funds will eventually come under severe pressure.

That's when a new MYra-like rescue vehicle comes into play instead of the current Pension Benefit Guarantee Corporation comes into play where hundreds of billions (if not trillions) of DPP's (or 401K's or money market funds for that matter) will be rescued and steered into UST's in the future.

I remember discussing this in "the library" years ago and nothing I've seen so far has changed my outlook at this point especially given the fact the term bail-in wasn't in the public lexicon yet.

But it is now and it'll come into focus at some point that we're at the doorstep of a UST bail-in one way or another.

It's only a matter of time before some type of economic or market turmoil ushers in some type of "rescue" of existing or future retirement savings plans or funds into treasury bonds of those countries who need to do so.

At that point in time most people will be glad for that option instead of an overburdened and underfunded PBGC that can't/won't bail them out but instead will force workers/savers to rescue the rescuer by more or less bailing them in when trillions in funds flow gradually and consistently into UST's etc.

It won't be seen as such but essentially that's what it'll be and you won't have a choice.

The demise of the USD is far from it's curtain call imho and the pusher has all the junkies right where the Fed wants them. Retiree's and savers are next in line.

Hammer DeaconBenjamin
Feb 1, 2014 - 9:44am

An Examination of Falling

An Examination of Falling Real Wages, 2010 - 2013 (UK)

Recent ONS publications have noted that households’ real wages have been falling following the 2008-09 economic downturn. Nominal wage growth below the rate of price inflation has resulted in real wages falling for the longest sustained period since at least 1964.


Feb 1, 2014 - 9:47am

Harvey's Up! (TFMR)

  • Keith Barron (via King World News): What happens in countries like Argentina with a currency collapse is you have to go around with big wads of money to pay for things and nobody ever has any small change. So what’s happened in some of the Latin American countries, and I specifically remember in Argentina, people started to use candies as small change. You would buy a newspaper and they would give you 3 or 4 candies back. I remember being in Kazakhstan and the small change was actually made out of cardboard. It was actually official money, but it was made out of cardboard. Kazakhstan didn’t have any metal to make the small change.
  • The people are restless and they are waking up to the corruption that’s going on throughout the world, and how the elites are taking almost everything, and how almost everybody else is left with nothing. they just passed laws in Spain to stop people from protesting. But all the laws in the world do not feed starving people. All the laws in the world do not put roofs over people’s heads. The entire global financial system has been floating on the fumes of the US Federal Reserve’s Ponzi scheme. So now with the Fed announcing the first tapering, and then the second, you can already see chaos engulfing the world as the Fed’s global financial scheme is collapsing. This collapse is engulfing the entire world, from Russia, to South Africa, into China and emerging markets across the globe. And the only way to stop this global route will be for the Fed to reverse course and dramatically increase QE.
  • Reuters: In a sign of the times, whistleblowers who help bust illegal gold shipments can get a bigger reward in India than those who help catch cocaine and heroin smugglers..."There has been a several-fold increase in gold smuggling this year after restrictions from the government, which has left narcotics behind." From travellers laden head-to-toe in jewellery to passengers who conceal carbon-wrapped gold pieces in their bodies — in the mistaken belief that metal detectors will not be set off — Indians are smuggling in more bullion than ever, government officials say, driven by the country's insatiable demand for the metal. That suggests official data showing a sharp fall in gold buying, which has helped narrow India's current account gap, may significantly underestimate the real level of gold flows.
  • Richard Russell: Certain members warned Bernanke to halt the Fed's wild money creation, fearing that it would wind up in hyper-inflation. But the Fed cannot completely halt its QE. The Fed is now buying 90% of the Treasuries that are put out for sale. If the Fed halts its buying of Treasuries, who will buy them? Certainly not China or USA investors. What dissenting Fed members are worried about is that bank reserves are growing and are beginning to resemble water behind a dam, pressuring to be released. When the dam finally breaks, all assets will go through the roof, and, as usual, leave the ever-suffering middle class behind. So that's the story and the problem of the era. As I said years ago, the choice is, inflate or die.
  • Koos Jansen: Across China people buy golden gifts for each other, especially by these low prices. It’s quite clear now that the Chinese people will only buy more physical gold as the price remains low, or will further drop. They are not scared of a loss in value, as it has been in their culture for thousands of years to save in gold as a core asset. The young people, this is taught by the elder. After many years of economic suppression they regained their freedom to do so, being spurred by newly acquired wealth. Lower gold prices give an extra boost to demand,” said Yang Chunyan, an analyst at Orient Securities Co. in Shanghai. “Sales of gold gifts typically accelerate in the two weeks leading up to the lunar new year and have really taken off.
  • Paul Craig Roberts and Dave Kranzler: We offer two explanations for the Fed's tapering. One is technical, and one is strategic. First the technical explanation. The Fed’s bond purchases and the banks’ interest rate swap derivatives have made a dent in the supply of Treasuries. With income tax payments starting to flow in, fewer Treasuries are being issued to put pressure on interest rates. This permits the Fed to make a show of doing the right thing and reduce bond purchases. As a weakening economy becomes apparent as the year progresses, calls for the Fed to support the economy will permit the Fed to broaden the array of instruments that it purchases. A strategic explanation for tapering is that the growth of US debt and money creation is causing the world to turn a jaundiced eye toward the US dollar and toward its role as world reserve currency. For example, currently the Russian Duma is discussing legislation that would eliminate the dollar’s use and presence in Russia.
  • Andrew Maguire: We started the week some $30 above the $1,250 options sweet spot, and it was no coincidence that on the following day, (with most participants on the side-lines ahead of FOMC), that at the exact moment of option expiry we hit that precise level. Of course this price manipulation pays no attention to the strong wholesale market and because of this divergent action, it allows large volumes of physical gold to exit the Western system without driving up the price. After the FOMC meeting, we saw the first real evidence of official intervention this year. Footprints strongly suggested it was the BIS who was actively intervening in the gold market. With stocks collapsing and gold rising, a worst case scenario was unfolding for the Fed. However, what was different this time around was that the FED had nothing but propaganda, or short term tricks to attempt to control the gold price. The large scale selling which took place yesterday came in size just before the news release. This was highly suspect and almost certainly related to BIS official supply.
  • Egon von Greyerz: What most holders of dollars don’t realize is that their currency is being totally debased in real terms by falling 97% against gold in the last 43 years, and 80% against the Swiss franc. It is totally amazing that anyone outside the US wants to hold dollars. And even the Americans would be much better off to dump their own currency. Based on my projection, the dollar should fall another 50% against the Swiss franc. But that doesn’t necessarily mean the Swiss franc will appreciate in real terms. So even if Swiss francs will be better to hold than dollars in the next few years, there is still a risk just like there is with most paper currencies. With the world financial and economic situation being at a very dangerous breaking point, for investors there is of course nothing safer than holding real physical gold and storing it outside the banking system.
  • Gerald Celente: The fall-out from our current economic climate is going to be unprecedented. For those who deny this is happening, understand that the above warning comes directly from our Treasury Department. They’re the money guys. And they are telling us what’s going to happen. And be assured it won’t just be stock markets that drop precipitously. What we’re talking about here is the collapse of the economy of the United States of America – the richest nation on Earth. The consequences will be devastating on every level and those of us on Main Street will be taking the brunt of the impact. Imagine a situation where jobs continue to be shed by the hundreds of thousands every month without abatement. A situation where the price of basic essentials like energy and food rise without restraint. A situation where medical care is so expensive that average Americans will go bankrupt trying to pay for government mandated coverage. A situation where whatever money you do have in savings becomes worthless because our currency loses credibility around the world. This is what’s happening right now. The scary version: There is no way to turn this around. It’s just going to get progressively worse. If you haven’t taken steps to prepare – to insulate yourself for an economic end of the world as we know it – then life for you and your family is going to be horrific. This is the depression.
  • Eric Sprott: “The price of gold and silver will both hit new highs in 2014. The price of gold goes north of $2,000, and silver will quickly go over $50. When it does, it will get a little crazy.” Sprott says, “They know a day of reckoning is coming, and they are setting up for it. . . . I am convinced some sovereign banking systems fail in 2014.”
  • Doug Casey: “Were going into what I call ‘The Greater Depression.’ It’s going to be much more serious than what happened in the 1930s. . . A depression is a period of time when most people’s standard of living drops significantly.” Casey explains, “There is a gigantic amount of debt in the U.S. at all levels—governmental, corporate and individual. Debt is a sign you have been living above your means. It’s a debt bubble, and this is a major reason the government wants interest rates low. When interest rates rise, it makes it harder for people in debt to service that debt. They are simply delaying the inevitable at this point, but it is inevitable what is going to happen, and we are going to have a fantastic depression.” On physical gold and silver, Casey says, “Gold is more important to own and perhaps a better bargain now than in 1971 or 2001, and the same is true of silver.”
  • Alasdair Macleod: Over much of the last century US dollar cash and deposits expanded on the back of a gold standard; in the same way today's emerging markets have expanded on the back of a dollar standard. Therefore, the redemption of these currencies into the US dollar mirrors pre-WW1 bank runs, except on a global scale. And In every bank run a bank pretends there is no problem until it is too late. Central banks cannot escape the fact that currencies depend entirely on confidence. Markets are now painfully reminding us of this truism, following the Fed's second tapering announcement. A whisper in New York becomes a storm in Delhi, Ankara, Sao Paulo, Buenos Aires and Pretoria. It is an important point. In the same way that under a gold standard a central bank had to have sufficient gold stocks to maintain confidence in its currency, an emerging market central bank has to have sufficient dollar reserves on hand. And this is why from a monetary perspective a desperate central bank is compelled to increase interest rates when Keynesian text books tell us such a move is certain to drive these economies into a deflationary slump.

All this and more on...

The Harvey Report!


DeaconBenjamin 4 oz
Feb 1, 2014 - 9:47am

Pushing 75

'How many people do I work with that are pushing 75? Or do I even know someone that old that's still working?'

I have had several co-workers work well into their 70s. A legal secretary where I work is over 65 and has no intention of retiring.

A couple weeks ago I spoke with an attorney who is 75 and still raising his grandsons. He is still working, as are other local attorneys past 65.

DeaconBenjamin ¤
Feb 1, 2014 - 9:49am

at the doorstep of a UST bail-in

Do you think a shooting war between China and Japan will be the catalyst?

Feb 1, 2014 - 9:52am

Deacon Ben and JY- generation gap

Last year I asked a room full of 18 to 22 yr olds "How many of you think Social Security will still be there to pay for your retirement by the time you are old enough to collect?" Not one of the 40 raised their hand.

I then asked "So how do you feel about this, having to pay in for your whole lives to a program that is simply going to take your money and never give it back"? They had never thought about it that way, and were kind of stunned. One girl said "Well, it's the law so I have no choice". To which I replied innocently "Really? NO choice?" and left it at that.

I think when these kids figure out they have been tricked into subsidizing people older and wealthier than they are (current retirees take out roughly 125k from the system more than they put in during their lives), there is going to be a very interesting change. Paradigm shifting, in fact.

Great article JY!

Feb 1, 2014 - 10:07am
Feb 1, 2014 - 10:12am


It's possible of course, but no...I think the turmoil starts when Japan's economy collapses or China has their first (public) major banking crisis both of which are already slowly underway.

A war over there in this day and age (not to mention multiple US security agreements that would dictate we get involved) would quickly and severely knee-cap the world economy if either the 3rd, 2nd or largest economies were disrupted to that extent because of war.

Guaranteed pensions or savings would be the least of our worries but a patriotic UST investment program (pension/savings "rescue") doesn't seem far-fetched in the event of war or an economic meltdown or freeze-up.

Feb 1, 2014 - 10:17am
Feb 1, 2014 - 10:43am

short George Orwell article

was reading thru posts at ZH and a poster linked to this site and the points put forward by George Orwell we very interesting


Feb 1, 2014 - 11:12am


So, if you're not part of the "solution" (as defined by government), then you're part of the "problem"? Mother was right, I am a "problem child".

Carlin said it best years ago:

Go Broncos!

Feb 1, 2014 - 11:45am

News Ticker: Markets

Who Else Is Swimming Naked? - Doug Kass,
Bears Have Woken Up From Hibernation - Jason Haver, Minyanville
Wal-Mart Rising Is a Bad Market Omen - Michael Gayed, MarketWatch
Look Out Below, Post-Bounce Random Edition - Barry Ritholtz, Bloomberg
Investors Should Take a Shot or Two. Relax. - Paul La Monica, CNNMoney
Help Wanted: Deceitful Central Bankers - Anatole Kaletsky, Reuters
4 Signs of a Potential ETF 'Apocalypse Now' - Leslie Kramer, CNBC
Marijuana Munis Could Save Strapped States - Catherine Dunn, Fortune
Proof Of Vodka's Grasp: Young, Dead Russian Men - Alice Walton, Forbes
No Need to Fear Populists with Pitchforks (Yet) - Rick Newman, US News

Bernanke: One of the Best Fed Chairs Ever - Steve Rattner, New York Times

Bernanke Arrived On Big Pretense, Departs a Failure - John Tamny, RCM

Is the Market Pullback a Validation of Cyclical? - John Kimelman, Barron's
5 Misleading Figures Investors Should Ignore - Jeff Reeves, MarketWatch
Save the Hate For Something Beyond myRAs - John Waggoner, USA Today
Troubled Turkey: We Don't Need this One Right Now - Paul Krugman, NYT
Five Simple Steps Toward Faster Economic Growth - David Malpass, Forbes
Laughing Off 'Year of Recovery' Pretense - Jeffrey Snider, RealClearMarkets
The All-Too-Real Costs of Free Trade - Clyde Prestowitz, Los Angeles Times
Facebook Turns 10: Interview w/Zuckerberg - Brad Stone & Sarah Frier, BW
Google's Wise, Money Losing Motorola Deal - Leonid Bershidsky, Bloomberg
All You've Been Told About Min. Wage Is Wrong - Jeffrey Dorfman, Forbes
Sorry, Equal Opportunity Just Isn't Good Enough - Matthew Yglesias, Slate
Inequality Not 'Defining Challenge' of Our Time - Jeff Jacoby, Boston Globe
The One Percenters Should Stop Complaining - Harold Meyerson, Investor's
Private Jets Boost Lifestyles Of Rich And Stranded - Scott McCartney, WSJ

Do Not Let January Turn You Against Stocks - Mark Hulbert, MarketWatch

Biggest 1M Selloff In More Than A Year - Lauricella, Scaggs & Strumpf, WSJ
January 2014: Bad Omen for Stocks? - Adam Shell & Kim Hjelmgaard, USAT
After the Worst January Since '09, What's Next? - Ben Levisohn, Barron's
Buying This Dip Is Riskier Than In 2013 - Chris Ciovacco, Ciovacco Capital
From Recession to Recovery, But No Strength - Editorial, New York Times
Obama's Pursuit Of Economic Decline - Peter Ferrara, American Spectator
The Long Goodbye to Bernanke Is Almost Over - Ylan Mui, Washington Post
Rate Hikes That Could Save EM From the Fed - Cedric Muhammad, Forbes
Emerging Markets' Victim Narrative - Rodrik & Subramanian, Bloomberg
Why Banks Won't Do Marijuana Money - Sam Kamin & Joel Warner, Slate
Politicians Must Stop the Building of Sports Stadiums - Art Carden, Forbes
Why So Many Ex-NFL Players Struggle With Money - Adam Molon, CNBC
For Some Boomers, Retirement Unthinkable - Abby Ellin, New York Times

Feb 1, 2014 - 12:09pm

I saw that cell phone video at the time

and I'm pretty certain this is it.

Man who shot Polish plane crash gunshots footage stabbed to death
Feb 1, 2014 - 12:10pm

creative/desperate CB financial accounting

Italy has how much gold?

Italy Unveils Most Bizarre Bank Bailout Yet

Submitted by Tyler Durden on 02/01/2014 - 11:18

On Wednesday, Italy's government voted final approval to a decree hiking the value of Bank of Italy's share capital from €156K to €7.5 billion - something that had not been done since the 1930s. Of course, politicians determining the fictitious value of a central bank is one thing, as idiotic as it may be. However, what is truly preposterous is the covert bailout that accompanies the decree: a key part of the decision was setting a 3% ceiling on the stake that the bank's shareholders can own in the central bank. This means, as Reuters reports, that Intessa and UniCredit, currently the central bank's largest shareholders with stakes of 42 percent and 22 percent respectively - not to mention two of Italy's most NPL-heavy banks - will have to sell the bulk of their central bank "equity" stakes. And who will they sell them to? Why the central bank itself, and in return they will pocket up to €3.5 billion ($4.7 billion) from the sale of their central bank holdings. Said otherwise, Italy took not only bizarro accounting, but also monetary financing of insolvent banks by the monetary authority, and thus Italy's taxpayers, to the truly next level.

Feb 1, 2014 - 12:31pm
Feb 1, 2014 - 12:47pm

RE: Tragic Plane Crash in Poland

Whether the current Prime Minister was in any way influenced by the sudden death of the previous president (and a large group of senior government officials incl. central bank chairman) in a tragic plane crash on approach to Russia will perhaps never be known.
Well, that was a nice ex post facto write up in Wikipedia carefully crafted to make it look like these most experienced Polish pilots stupidly flew into the ground in really crummy weather using a non-precision approach when they had precision approach facilities (GCA) available. The only way they would have used a non-precision approach would be if they did not trust the Russians (they didn't). These guys did not have a death wish, and the fabricated report makes it sound like they did. The current Prime Minister (Mr. Tusk), was not on the plane, because he was an elitist agent, and he was left behind in Poland as a caretaker of the government since he was not ideologically aligned with the government officials on the plane. The officials on the plane were in the process of implementing sound financial and economic reforms in Poland in disregard of the global central bankers desires, but Tusk was not supportive of those aims. What happened to the Polish officials was a trap from the get go. The Russians somehow got remorse after 60 years regarding the WWII slaughter in cold blood of over 22,000 Polish officers and intellectuals held prisoners by the Russians, and the Russians invited the Poles to Russia for a formal apology ceremony. Their destination airfield was a non-standard military field, and when they got there, the weather was unexpectedly below legal approach minimums due to oh, so, convenient really bad weather (Russian HAARP, anyone?), and so conveniently, the Smolensk unmarked Russian military airfield was not in the approach navigation database on the Polish airplane. The pilots probably got radioed the info for the approach. In preparation for the visit the Poles had initially requested a Russian navigator to do the communication with Russian speaking ground control, but their request was ignored, probably because they did not want to kill a Russian in the planned crash. In addition to having to fly the plane and also handle radio communications (normally the navigator's job), the pilot was distracted by unrequested chatter from the Russian Ground Controlled Approach (GCA) telling them they were on glide path, when they were not. The descent info for a GCA precision approach conflicts with the descent profile for a non-precision approach, and can be very distracting if you are trying to fly a non-precision approach, because the descent profiles are very different. The GCA operator also was lying about their relation to glide path. The pilot may also have abandoned the non-precision approach profile in an attempt to duck under the overcast and get down to where he could see the approach lights. He would then have been using a visual approach based on the fake approach lights rather than using the NDB info, which anyway had approach minimums that were higher than the then current crummy ceiling and visibility at the field. Eye witnesses recorded that the Russians had set up temporary runway lights in the woods short of the real military runway, and the pilots tried to land using the fake runway lights. If they thought they were long coming into the runway, it's because they saw the fake runway lights, and cut the power because the fake lights were short of the approach end of the runway, and they thought their wind info was off and messed up their approach timing off the NDB. Too late did they recognize they were landing in the woods, and even then they managed to fly the airplane enough to get a crash landing where some of the passengers and crew survived. Phone videos taken at the crash site right after it occurred had audio of gunshots where the Russian military was going around making sure there were no survivors. Shortly after this the bystanders were run off, and later the videos were expunged from the internet, but I saw them before they got purged. The bodies of the passengers and crew were inexplicably held in Russia for about two weeks, and when they finally did return the bodies, they were in sealed caskets that were not permitted to be opened. Tragic? Yes. Accident? No. But the globalists' man now runs Poland. Very neat and tidy, no? No banksters trying to fly off the 33rd floor of bank headquarters. No suicidal activities in a remote area by the side of the road. Just a very tragic plane crash where Rambo pilots exceeded their and the airplane's capabilities and predictably made a very messy indentation in the ground. DayStar
HD Polish Plane Crash - Govt Officials MURDERED! STARTLING NEW EVIDENCE!!

Feb 1, 2014 - 1:47pm

Turkey & Poland

@ivars: Turkey in hot water b/c of oil for gold... Hmm, what wild and wooly supposition. Whatever makes you think there might be a connection? And where have I read such a crazy hypothesis before... :-)

@DayStar: I often forget to put out the /sarc/ tag. The plane crash at Smolensk reeks to high heaven. I am not convinced the Russians are ultimately to blame -- it would be a bit over the top to decapacitate the entire Polish government and military on its way to commemorate the decapacitation of the Polish military. But then again, Russian subtlety is NOT a widely-known national characteristic for a reason. Regardless of who pulled the strings and how, this is a tragedy --but about as random as a Shakespeare play.

Feb 1, 2014 - 1:57pm

Some vintage KWN

From November 2012. I love it when these idiots are proven to be, well, idiots!

"the arrow in the chart below is pointing to a $3,000+ target for gold by February 2014"

DayStar ButchCassidy
Feb 1, 2014 - 2:31pm

RE: Vintage KWN

I expect if we browsed the archives we could find not only bad KWN calls but a few bad calls by our very own TFMR. The fact is, the PM prices do not reflect any kind of reality but instead reflect what the bankers paper machinations make them to be. Like Bill Holter said the other day,

“We” were right yet, we miscalculated one thing…”we” never believed that sovereign governments would bankrupt themselves in an effort to hide the truth. We underestimated the lengths that would be taken to prolong the current (soon to be past) system. Is JP Morgan, Goldman Sachs, AIG, Credit Swiss or some Chinese behemoth going to have the ability to “pay up” when the game stops? Wouldn’t a U.S. bankruptcy…”bankrupt” whoever it is that sold the derivative insurance in the first place? Going just a step further, what will dollars or euros be worth when the banks go BK? Don’t they derive their “values” based upon the “full faith and credit” of the respective governments? Was it possible for these “alarmist wolves” to have foreseen central banks (the NY Fed?) selling gold that wasn’t even actually their own? Did “we” believe that 100 paper ounces would be sold for every 1 real ounce that actually exists? Could ANYONE have forecast that Mother Nature would be temporarily stuffed and metals prices would drop in the face of record demand with stable or actually shrinking supply? If you go back to 2007, ask yourself, how would anyone have been viewed if they used the words “bankruptcy” and “United States” in the same sentence? Fast forward and we hear this all the time now on mainstream media…and even from our own congressmen, senators and president! Why do you suppose it’s “OK” now and never before?

When the bankers control all the levers of power and have lulled the people to sleep with MOPE, bread, and circuses, why should it be thought strange that the global elitists, who among just 85 of them have more wealth than the bottom 50% of the people on the planet, would be able to distort the economy and make it appear to function on fiat fumes in defiance of natural laws? The fact is, the economy would have corrected long ago and fixed itself if the banksters had not implemented a control system that keeps it going long after natural forces should have fixed the problems. Like Bill says, there is a wolf, and he is coming.


Feb 1, 2014 - 2:33pm
DayStar J Y
Feb 1, 2014 - 2:56pm

RE: Russians Over the Top

JY, just like the flying banksters, you can never know for sure, because these assassins are good at what they do. The things that makes me think the Russians were an integral part of this assassination was the bait the Russians gave the Poles of the formal apology (the Poles have long held a serious grudge against the Russians for what they did) and the fact that the Russians moved the runway lights and made sure there were no survivors and held the bodies till they could encapsulate them in "carborundum" caskets. Over the top, yeah, but who ever said Putin was a wuss?


Feb 1, 2014 - 3:25pm

Quote:@ivars: Turkey in hot

@ivars: Turkey in hot water b/c of oil for gold... Hmm, what wild and wooly supposition. Whatever makes you think there might be a connection? And where have I read such a crazy hypothesis before... :-)

I reread it, very prescient, did not realize then..seems Erdogan govt has decided to dig in. But what a massive organization bankers are able to develop in a Muslim state! Relatively secular, but still.. the holding of sons of ministers reminds of Rome where emperor kept sons of his generals in Rome just in case he needs to pacify the generals ambitions. Old method to influence fathers.

I am more focusing purely on physical gold flows, not so much how they are spent, so this confirmation of import increases in December proved the defiance of Erdogan and the reasons they needed to hide capital ( called "corruption" in bankers language when done by OTHERS) for gold handling.

Also, another reason Turkey is targeted for takeover are 8000 tons of gold held by population. Worlds 3rd-4th largest war chest. These are planned by bankers to be reversely flown back into West if they could topple Erdogan and his friends.

I do not pay so much attention to oil for gold etc; but of course Turkish alliance building are now very important as everyone realizes that potential gain for a friend of Turkey is gold; and that may mean so much in near future when govts compete who will be able to back their currencies with gold that it may outweigh all other factors. So far EU is interested UK is against ; Iran is definitely interested; Russia is interested; Japan is; China is; etc.. Every one who has something to offer Turkey would be; only bankers use pure intimidation to get it, though. They have nothing else to offer.

Turkey is in position of strength as it holds control over these tons; but its being severely tested and it will need allies so will have to part with some of gold; On other hand, they only need about 2000 tons to back their currency now due to relatively small debt; probably they have these available when talking about out of ordinary economic plan A B C within next months. They can give some gold away for goods they need, strategic ; and still have enough.

The Sochi games come in here interestingly as the USA is boosting military presence in the Black Sea to assist in case of terror acts; I am 100% sure there will be terror act but the reason for ships is most likely Turkey...there could be ways the USA create a nice mess around Sochi terror; like with "Liberty" in Israel-Arab war , someone may conveniently "inadvertently" hit those ships; what if it happens to be some missile marked as Turkish?

The USS Mount Whitney left its homeport of Gaeta, Italy, today — the first of two U.S. Navy ships that will be operating in the Black Sea during the Sochi Olympics, Pentagon officials said.

The other vessel, the frigate USS Taylor, is scheduled to depart an Italian port on Saturday, officials said. Both ships will likely enter the Black Sea sometime over the coming week.

I am becoming more and more amazed at these chess games they play on the level which is outside Plato's cave.


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Key Economic Events Week of 4/15

4/16 9:15 ET Cap Util and Ind Prod
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