[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]
I don't usually watch the State of the Union address, but when I do, I hear something different than most everyone else. As I recall, the State of the Union Address went something like:
"My fellow Americans, things do not look too good for our collective future.
Our net worth is NEGATIVE $16 trillion dollars; the nation is intensely split between nonsensical party lines; our trading partners are negotiating trade deals without the dollar; they're not buying US Treasuries; they're buying gold; bitcoin is more popular than Obamacare; Germany wants its gold back…which we may or may not have rehypothecated; and the gold price seems poised to break previously held records.
The simple truth is this: no foreign interests are investing in the US anymore in this kind of environment. This is where you come in.
We're looking for a few good men and women, much like yourselves, to bite the bullet and enter into 'MyRA.' Pretty catchy, huh? It's a new kind of retirement program. A pilot program to be more specific. It's like a test. Unlike the traditional ponzi scheme products we have brought to you before, like Social Security, this retirement plan takes on the characteristics of a ponzi scheme as well as a pump-and-dump scheme, all-in-one.
This might seem simple to the layman. But to the savvy investor it screams of representing this great nation's last, desperate attempt to dupe everyday Americans into buying US Treasuries so that we can continue to run our deficit for just a little while longer. Your government needs you more now than ever.
The idea is to offer folks a 'starter' account to let people start saving even if they can't afford the large initial investment often needed for a private, commercial retirement account. All you need is $25, and you can contribute as low as $5 from your paycheck. MyRA will operate like a Roth IRA. The funds would be backed by US government debt.
Why now? Because defined-benefit plans are waning. Whereas in the early 1990s they covered 35% of Americans, by 2011 they only covered 18%. My fellow Americans, as Dollar Vigilante reported, retirement is the new death for many Americans. And the devaluation of your dollar aside, I feel the problem might have something to do with that the government has yet to make it simple for savers to save, like ObamaCare has made it simple to stay healthy.
That's why America needs a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in. Unless of course any of the aforementioned crises destabilize the entire system, and maybe, just maybe, your accounts are used to bailout some of the institutions with which you are familiar when it comes to bailing out.
Although I am now expected to elaborate on the subject, I won't offer much in the form of specifics. Except this one small detail: in the case of an emergency, like a government audit or medical emergency, you can withdraw your funds without paying a penalty. Just be forewarned, there might be some paperwork.
Now, you might read tomorrow on the 'internet' that retirement savings come with some shortcomings in comparison with existing individual retirement accounts. But who cares if you will be forced to pay tax on your contributions before you deposit money into your MyRA? Who cares if you'll then lose the tax advantage of a traditional IRA?
Yes, as the President, I am well aware that the original idea behind traditional IRA tax rules was to allow Americans to pay the IRS during retirement, not during their young years, when you were raising families and so on and so forth. And that sometimes you could pay a lower rate when you withdrew the money in retirement since your income would be lower.
Yes, I am well-aware that you won't get that break with MyRA.
But your account balance can never go down with MyRA. Sure, you might say that is true for anyone who invests retirement savings into US Treasuries, as long as you hold onto it until it matures. Or, perhaps you'll say that since the Federal Reserve collapsed interest rates to save the financial system five years ago, the return on a short-term Treasury bonds hasn't kept up with inflation.
But keep in mind that, with a MyRA account, your money will be invested in the Government Securities Investment Fund that is also available to federal workers. That fund's average annual return for the past three years of 2.24% is pretty good, right? You can't get that at your bank… Doesn't make that average annual inflation rate for consumer prices over the past three years of 2.07% look so bad now does it? And those, by the way, are the official numbers.
But, let's face it America, you just don't have the discipline to keep your hands off your money without IRA withdrawal penalties. We are here to lend you a helping hand. Even if it seems like you're the one doing the lending.
That's why my administration wants to limit the tax benefits to top earners to 28% of what they set aside. And my administration is proposing a cap on tax preferred savings accounts of $3.2 million, which I think is all anyone needs to fund a reasonable pension in retirement. Seems reasonable right?"
I went to bed pretty sure I had heard one thing. But the following morning, as I read the news, many other news outlets had heard something quite different. Maybe I need to get my ears cleaned.
MyRA seems to be the flagship program of 2014 for the Obama Administration. Be forewarned, if that's the plan to compensate for "tapering" by the Federal Reserve, things will get much worse quickly for the USSA. We have been warning that the US government will look to take most of the funds in retirement accounts like 401ks and IRAs and force people into their government debt that lose value to inflation every year. The MyRA seems to be their first attempt to do this… and it probably won't stop there.
I suggest that people cash in whatever they can of their current 401ks and IRAs now and get those funds internationalized and away from the ever needy US government… even if it means taking a tax hit. And, if you can't or don't want to cash out your retirement funds now before they get fully nationalized and inflated into worthlessness then you should change your IRA into a self-directed IRA which allows you to internationalize the funds in the IRA into almost any investment on Earth.
TDV WEALTH MANAGEMENT CRISIS CONFERENCE
The solutions to be presented at the TDV Wealth Management Crisis Conference will be much more sophisticated than, "Give us your money, and we'll, maybe, give it back," which seems to be the driving theme of MyRA.
At the Crisis Conference you will receive an actionable plan, based on your personal situation, geared towards protecting you and your wealth today and for the future.
Because if what I heard this week during the State of the Union was correct there will continue to be more debt, more taxes and the government is looking for more ways to get more money from their citizens to fund their illicit operations. When they are getting so desperate as to even float the idea of MyRA it likely means they will soon nationalize all retirement accounts and force people into Treasury Bonds which are certificates of confiscation. And they will continue to close more doors so those who still have some wealth can't escape with it as they are doing with FATCA in July, 2014.
Many American's cheered the President's speech wildly as he spoke about how he will be disregarding even Congress and just instituting all manners of laws and crazy socialist schemes at whim like a dictator.
So this is how liberty ends… to thunderous applause.