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Is the Health Care Bill a Distraction From What’s Next? March 24, 2010

Posted by Jeff Nabers in : Hyperinflation, Money, Self Directed IRA Solo 401k , 11comments

Everyone is talking about health care. “How could the politicians do this with a strong majority of American in opposition?”

This video provides some insight into the never-ending string of government takeovers, and seeing the whole picture is alarming. One lesson from all of this is that complaining doesn’t work. Neither does disapproving. What does work is being prepared to defeat government takeover attempts.

Discussed in the video is what I believe is one of the most fundamental characteristics for a free society. Enjoy!

News Flash: World Decides Not To End February 25, 2009

Posted by Jeff Nabers in : Money, Precious Metals , add a comment

I want to get this news flash out to you, but there’s no sense in reinventing the wheel. I think the first half of Bill Bonner’s recent blog post sums it up. See it here.

Why to self-trustee your Solo 401k plan: An argument for direct possession of your assets December 18, 2008

Posted by Jeff Nabers in : Money, Personal Enjoyment, Personal Productivity, Precious Metals, real estate, Self Directed IRA Solo 401k , add a comment

bankofself-copy

We have seen some unbelievable things over the past few years… especially the past few months. The only thing certain is that there is a lot of uncertainty ahead. If you haven’t already done so, right now I strongly suggest you watch the 30 minute condensed version of the film I.O.U.S.A. This film features David Walker, the former U.S. Comptroller General… aka the chief accountant of the government. He tried to fix the government’s financial problems, but Dick Cheney and others told him he needed to stop because they didn’t need solving. So he stepped down from his position and decided to prove to the world just how bad of shape our government really is in.

Today some people, including congressmen, are promoting some very extreme ideas. Some of these ideas involve the government “nationalizing” (or “confiscating” for those of us who speak directly) the assets of the people. Some plans even call for confiscation of retirement account assets specifically. In one scheme called the “Guaranteed Retirement Account” all retirement assets would be liquidated and handed over the Social Security Administration for investment management in a program that would provide a guaranteed return of 3% per year. This kind of silliness doesn’t need to be gratified by anything more than a brief response:

  1. We’ve already seen how well the Social Security Administration manages money. It simply doesn’t. There is no money. There is no account. It just hands its income straight over to the general spending account of the government, and (not surprisingly) it gets spent!
  2. Liquidating $16 trillion is impossible. It would crash the securities market entirely, and $16 trillion would not be withdrawn. If you started liquidating people’s retirement accounts alphabetically by name, those with names that start with letters n through z would receive little to nothing because of the price free fall created by the first half of the mass sell off.
  3. The real world cost of living increases do not jive with published CPI figures, and there is often a discrepancy of much more than a few percent. A 3% return on investment would likely be a steady loss of principal when accurately indexing for inflation.

While we may not see that particular scheme enacted into law, it can’t be ignored that this type of solution is being considered. This government theft approach isn’t unheard of. In fact, Argentina just did it! Don’t forget that (more…)

The impossibility of bailout success and the guaranteed alternative success plan that depends on you November 7, 2008

Posted by Jeff Nabers in : Health, Money, Personal Enjoyment, Personal Productivity, Precious Metals, real estate, Self Directed IRA Solo 401k , add a comment

This is a message of prosperity rather than doom and gloom. Read through to the end.

A tremendous amount of homeowners are facing foreclosure. CNN Money reports foreclosures are up over 70% from this time last year. Banks are failing left and right, but let’s just take a look at the bailout concept in the most direct and extreme fashion for purposes of illustration.

The largest bailout possible

Imagine that every single homeowner that has less than 30% equity in their house at today’s prices receives from the Fed a check payable to their mortgage company that will pay their balance down to bring their equity to 30%. There is no more of a direct way to address the foreclosure and housing problem. What would the result be?

  1. Equity doesn’t matter. People got into mortgage loans that have payments higher than their income will support, and rising food and energy prices are lowering the household budget for mortgage payments. You could lower interest rates to 0% (forget about the market chaos that would create for a moment) and many people still wouldn’t be able to afford their homes.
  2. Home prices would fall because many would use the 30% equity in hopes of being able to sell their home and buy a less expensive home. This would accelerate the downward pressure the median home price. Many families would return to renting after touching the hot stove of home ownership. Of course, they would be seeking affordable rent which would also put a downward pressure on median home prices.
  3. I can’t estimate how many trillions of dollars would have to be created by the Fed for those types of bailout checks to be written… but you can be certain it would have a HUGE direct impact in raising inflation to levels unseen in American history. Injecting new money into the economy makes all prices go up. In this scenario, Americans would literally not be able to afford to eat if they stayed in their home. Home prices would crash almost to zero because three bedrooms and two bathrooms would become less important than food. There would be much larger social problems because, with this magnitude of inflation, food would become so expensive that theft, robbery, and violence would be the only viable means of survival for some.

A direct, swift bailout to cure economic symptoms would create very difficult times.

The smallest bailout possible

The smallest bailout is one that (more…)