There are three reasons why the IRA/401K changes are likely to occur:
1. the Federal Reserve is the only buyer for US debt at this point – forcing IRA/401K money into US bonds/notes (debt) provides a new ‘buyer’ for the US debt – govt and Wall Street can continue to pretend that there is demand for US debt
2. Wall Street is looking for the next game – preferably one that can be played out of the spotlight – creating a bunch of annuities would fit the bill very nicely
3. as the Boomers retire and start spending down their investments, that capital will no longer be available to govt / Wall Street – it might be hard to continue supporting the bond and equity bubbles without the Boomers’ capital – converting IRA/401Ks to annuities STOPS THIS DRAWDOWN cold – retirees will be paid with printing press money and accounting games while their capital remains in the system
Reason #1 is likely to cause the IRA/401K changes to happen a lot faster than anyone is expecting
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There’s that Rush song playing in my head again, “If you choose not to decide you still have made a choice”
