Brilliant blog entry from Karl Denninger

[stockstradr]

This latest blog by that crazy nut, Karl Denninger, is absolutely brilliant.

The Folly of Investing Today

I think the sole criticism one could make is that he probably underestimates how long Those in Power can prop up the scam.

For example, consider this link which Rich brilliantly included in his ~Other bubble bloggers~ column:

Government wants your 401(k)

So our government now has its lustful (and desperate) eyes on the 5+ TRILLION in our aggregate 401(k) and IRA’s, not to mention TRILLIONS more in pension plans.

Think for a moment, when Those in Power inevitably legislate the power to force-feed Treasuries into our retirement accounts…think how many YEARS more that will allow kicking the can forward (on delaying the total collapse of the Dollar and dollar-denominated Treasuries).

And now you understand why I remain in a LONG position on United States treasuries, even as inflated as they already are.

However, everyone with money in 401(k) or IRA should consider the ugly long-term implications of keeping that money in those retirement accounts and waiting for the slaughter:

1) When the legislation (to force-feed treasuries into your retirement accounts) kicks in, it will include vastly increased early withdrawal penalties. The sheep must be kept in the pen for slaughter.

2) The first crisis will likely be the horrific crash of the treasury price bubble that occurs when the world turns its back on treasuries at the same time our government has maxed out stuffing Treasuries into our retirement accounts. (No chips left to play)

That will start the crash of the value of your retirement accounts

3) No chips left to play leaves our government with only one last option: print dollars and inflate its way out of foreign debt.

That will additionally destroy the value of the dollar-denominated treasuries stuffed into your retirement accounts.

4) When we retire tax rates will be over 30% (over 50%?) so we’re screwed that way also, when we withdraw at retirement.

5) You really think you’ll be able to start withdrawing money from those accounts at 59 and a half years of age? Are you dreaming! Our government will probably change that to make you wait until you are 75 years old, same for onset of Social Security benefits.

6) Yes, you KNOW they are going to continue stuffing the national social security trust full of treasuries also, so you won’t have that to fall back on either.

I’m NOT suggesting anyone take an immediate early withdrawal of all cash out of retirement accounts.

I’m telling you that I’m working with a good CPA to plan roughly a 3 year, minimal tax consequence plan of structured step-by-step early withdrawals of ALL money out of my 401(k) and IRA. Then get it out of the country into a safe currency. And I’m going to stop contributing to my 401(k) beyond my employer’s 1-to-1 % match ceiling.

I’m guessing on the 3-year time frame. (Your guess is as good as mine as to when the slaughter will start – you have to make your own guess, which will then determine the schedule for incrementally early disbursing money out of your retirement accounts.)

And I leave you with this last lovely thought:

What do you think will happen to the stock market indexes when those TRILLIONS of dollars currently in stock and mutual fund positions (in our retirement accounts) are forced to be sold to buy US Treasuries?

[Eugene]

[quote]In a 2010 budget blueprint unveiled Feb. 26, {that would be Feb.26, 2009. – E.} President Obama proposed that employers sponsoring 401(k) plans or other defined contribution plans should be required to offer automatic enrollment in these plans[/quote]

say what? 401k’s should be required by law to offer defined-benefit annuity plans? OMGWTFBBQ! Gubmint takeover of 401(k)’s!

BTW, I love this part: “the Obama administration is obviously scrambling to find ways to sell government debt without having to raise interest rates. ” When 10-year is at 2.59% and falling, that’s soooo hard…. But, I guess, it’s much harder to understand why 10-year is at 2.59%, if you get your econ 101 knowledge from right wing web sites rather than from “ivory tower” Keynesians.

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

[Eugene]

[quote]In a 2010 budget blueprint unveiled Feb. 26, {that would be Feb.26, 2009. – E.} President Obama proposed that employers sponsoring 401(k) plans or other defined contribution plans should be required to offer automatic enrollment in these plans[/quote]

say what? 401k’s should be required by law to offer defined-benefit annuity plans? OMGWTFBBQ! Gubmint takeover of 401(k)’s!

BTW, I love this part: “the Obama administration is obviously scrambling to find ways to sell government debt without having to raise interest rates. ” When 10-year is at 2.59% and falling, that’s soooo hard…. But, I guess, it’s much harder to understand why 10-year is at 2.59%, if you get your econ 101 knowledge from right wing web sites rather than from “ivory tower” Keynesians.

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

[Eugene]

[quote]In a 2010 budget blueprint unveiled Feb. 26, {that would be Feb.26, 2009. – E.} President Obama proposed that employers sponsoring 401(k) plans or other defined contribution plans should be required to offer automatic enrollment in these plans[/quote]

say what? 401k’s should be required by law to offer defined-benefit annuity plans? OMGWTFBBQ! Gubmint takeover of 401(k)’s!

BTW, I love this part: “the Obama administration is obviously scrambling to find ways to sell government debt without having to raise interest rates. ” When 10-year is at 2.59% and falling, that’s soooo hard…. But, I guess, it’s much harder to understand why 10-year is at 2.59%, if you get your econ 101 knowledge from right wing web sites rather than from “ivory tower” Keynesians.

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

[Eugene]

[quote]In a 2010 budget blueprint unveiled Feb. 26, {that would be Feb.26, 2009. – E.} President Obama proposed that employers sponsoring 401(k) plans or other defined contribution plans should be required to offer automatic enrollment in these plans[/quote]

say what? 401k’s should be required by law to offer defined-benefit annuity plans? OMGWTFBBQ! Gubmint takeover of 401(k)’s!

BTW, I love this part: “the Obama administration is obviously scrambling to find ways to sell government debt without having to raise interest rates. ” When 10-year is at 2.59% and falling, that’s soooo hard…. But, I guess, it’s much harder to understand why 10-year is at 2.59%, if you get your econ 101 knowledge from right wing web sites rather than from “ivory tower” Keynesians.

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

[Eugene]

[quote]In a 2010 budget blueprint unveiled Feb. 26, {that would be Feb.26, 2009. – E.} President Obama proposed that employers sponsoring 401(k) plans or other defined contribution plans should be required to offer automatic enrollment in these plans[/quote]

say what? 401k’s should be required by law to offer defined-benefit annuity plans? OMGWTFBBQ! Gubmint takeover of 401(k)’s!

BTW, I love this part: “the Obama administration is obviously scrambling to find ways to sell government debt without having to raise interest rates. ” When 10-year is at 2.59% and falling, that’s soooo hard…. But, I guess, it’s much harder to understand why 10-year is at 2.59%, if you get your econ 101 knowledge from right wing web sites rather than from “ivory tower” Keynesians.

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

[stockstradr]

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

I smartly guessed the propaganda will push indexes higher.

Meaning that recently I’ve stayed away from short positions, except for..
I (stupidly) held onto one 5%-of-portfolio put option (DEC 17 2011) on the S&P. It is presently out of the money to the tune of 40% loss. I should have dumped that option back on July 2nd when I noticed it was then in the money by +30%; selling it then would have allowed me to re-buy it TODAY.

And I held my double-short position in gold against the market from $1200/ounce up to the present $1300/ounce, putting that (large) position down over 15%. That was stupid. The problem with my theory (that gold will have a major pullback) is that gold might go to $3000/ounce before that pullback is seen!

My long-the-long bond position is only up 5% because I came late to that trade.

So I’m an amateur who can make mistakes like everyone else.

[stockstradr]

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

I smartly guessed the propaganda will push indexes higher.

Meaning that recently I’ve stayed away from short positions, except for..
I (stupidly) held onto one 5%-of-portfolio put option (DEC 17 2011) on the S&P. It is presently out of the money to the tune of 40% loss. I should have dumped that option back on July 2nd when I noticed it was then in the money by +30%; selling it then would have allowed me to re-buy it TODAY.

And I held my double-short position in gold against the market from $1200/ounce up to the present $1300/ounce, putting that (large) position down over 15%. That was stupid. The problem with my theory (that gold will have a major pullback) is that gold might go to $3000/ounce before that pullback is seen!

My long-the-long bond position is only up 5% because I came late to that trade.

So I’m an amateur who can make mistakes like everyone else.

[stockstradr]

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

I smartly guessed the propaganda will push indexes higher.

Meaning that recently I’ve stayed away from short positions, except for..
I (stupidly) held onto one 5%-of-portfolio put option (DEC 17 2011) on the S&P. It is presently out of the money to the tune of 40% loss. I should have dumped that option back on July 2nd when I noticed it was then in the money by +30%; selling it then would have allowed me to re-buy it TODAY.

And I held my double-short position in gold against the market from $1200/ounce up to the present $1300/ounce, putting that (large) position down over 15%. That was stupid. The problem with my theory (that gold will have a major pullback) is that gold might go to $3000/ounce before that pullback is seen!

My long-the-long bond position is only up 5% because I came late to that trade.

So I’m an amateur who can make mistakes like everyone else.

[stockstradr]

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

I smartly guessed the propaganda will push indexes higher.

Meaning that recently I’ve stayed away from short positions, except for..
I (stupidly) held onto one 5%-of-portfolio put option (DEC 17 2011) on the S&P. It is presently out of the money to the tune of 40% loss. I should have dumped that option back on July 2nd when I noticed it was then in the money by +30%; selling it then would have allowed me to re-buy it TODAY.

And I held my double-short position in gold against the market from $1200/ounce up to the present $1300/ounce, putting that (large) position down over 15%. That was stupid. The problem with my theory (that gold will have a major pullback) is that gold might go to $3000/ounce before that pullback is seen!

My long-the-long bond position is only up 5% because I came late to that trade.

So I’m an amateur who can make mistakes like everyone else.

[stockstradr]

BTW2, are you still waiting for S&P to hit 600 or did you decide to go long stocks? (Sorry, couldn’t resist)

I smartly guessed the propaganda will push indexes higher.

Meaning that recently I’ve stayed away from short positions, except for..
I (stupidly) held onto one 5%-of-portfolio put option (DEC 17 2011) on the S&P. It is presently out of the money to the tune of 40% loss. I should have dumped that option back on July 2nd when I noticed it was then in the money by +30%; selling it then would have allowed me to re-buy it TODAY.

And I held my double-short position in gold against the market from $1200/ounce up to the present $1300/ounce, putting that (large) position down over 15%. That was stupid. The problem with my theory (that gold will have a major pullback) is that gold might go to $3000/ounce before that pullback is seen!

My long-the-long bond position is only up 5% because I came late to that trade.

So I’m an amateur who can make mistakes like everyone else.

[UCGal]

How do you withdraw from your 401k and keep your job? Previous employer’s 401k funds can be rolled to a self directed IRA… but I thought you were not allowed to cash out, withdraw funds form a current employer 401k plan. (Trust me, I hate our options of funds at work – if I could roll it – I would.)

I know you can stop contributing. But if you already have funds in the 401k and do not want to give up your job… isn’t that money stuck.

[UCGal]

How do you withdraw from your 401k and keep your job? Previous employer’s 401k funds can be rolled to a self directed IRA… but I thought you were not allowed to cash out, withdraw funds form a current employer 401k plan. (Trust me, I hate our options of funds at work – if I could roll it – I would.)

I know you can stop contributing. But if you already have funds in the 401k and do not want to give up your job… isn’t that money stuck.

[UCGal]

How do you withdraw from your 401k and keep your job? Previous employer’s 401k funds can be rolled to a self directed IRA… but I thought you were not allowed to cash out, withdraw funds form a current employer 401k plan. (Trust me, I hate our options of funds at work – if I could roll it – I would.)

I know you can stop contributing. But if you already have funds in the 401k and do not want to give up your job… isn’t that money stuck.

[UCGal]

How do you withdraw from your 401k and keep your job? Previous employer’s 401k funds can be rolled to a self directed IRA… but I thought you were not allowed to cash out, withdraw funds form a current employer 401k plan. (Trust me, I hate our options of funds at work – if I could roll it – I would.)

I know you can stop contributing. But if you already have funds in the 401k and do not want to give up your job… isn’t that money stuck.

[Author]

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