Longboat Retirement Solutions LLC

Don’t Worry, The Government Will Save You February 5, 2013

Filed under: Corporate Malfeasance,Economics — larsfforsberg @ 6:33 pm
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BY:  Lars Forsberg

The next “fiscal cliff” will once again dominate the news with dramatic political showdowns and last minute deals.  It will pit the pit the Republicans against the Democrats…..the “we are for the hard working middle class” vs. “we are for the hard working middle class.”

Wait a second.  They both say the same thing, don’t they?  But don’t they vote different?  No.  Isn’t the one party for the rich people, while the other is helping the poor?  No.  Doesn’t the one party get all of their money from the big corporations, while the other party gets their money from good people like you and me?  No, they both get their money from the same corporations, the same lobbyists, and the same banks and they both use our money to get re-elected.

Now hold on a second, do you mean to tell me that that nice guy up there, with the great haircut and expensive suit, is just telling me what I want to hear?….so that he gets my vote in the next election cycle?  Of course you know this already.  You know that the politicians will say whatever is hot in the polling data at the time of whatever speech to whatever crowd they are speaking to.  In the end the lobbyists, the big corporations, the politician, and the media win.  You lose.

The next fiscal crisis will be no different.  The only thing that changes is what really happens behind the scenes.  Who will they steal the money from, and who will they give it to?

How much money did you donate (willingly, not tax money) to which candidate?  None?  Oh….you have no voice; your opinion does not matter; go away.  You live where?  Oh, so and so already has a lock on that state, you don’t matter.  Good by.

The question is: Who will they take the money from and to whom will it go?

Currently the hot debate is the deficit, so there will be a lot of hoopla surrounding this issue.  How will they tackle the debt ceiling?

How about raiding retirement accounts?  There is roughly $18 Trillion in retirement savings in the US.  Hmmm.  Interesting proposition.  What would we need to get the American public to voluntarily give there private retirement savings to the government to manage?

How about another stock market crash?  This would kill many birds with one stone.  Those in the know could once again short the market, and make tons of money; then of course purchase stocks at rock bottom prices after the crash.  The people would once again scorn Wall Street (deservedly, but it will be misguided); and demand that the government (who we said before are in bed with Wall Street) do something to make our retirement accounts safe from these darn Wall Street guys!  At this point, the government can swoop in and save the day.  Yay government!  Congress could force pension managers to purchase “secure” government bonds, so that we don’t have these ups and downs.  Hurray!  Of course, this means loaning a bankrupt beurocracy your hard earned and saved money.

Hold on.  Can they do that?  Yes, it’s been done many times throughout history.  Would they do that?  I hope not, but who knows?  I would not put it past them.  They only need to sell it to the vast majority of Americans who have no idea what the real intentions of the political class consist of.  Those intentions are clear to anyone who is watching: gaining more power, by any means necessary.

If you have not yet considered it, now may be the time.

Washington is seriously thinking about taking possession and control of your retirement and your future; shouldn’t you?


The Fiscal Cliff – Explained January 18, 2013

January 18, 2013
Santiago, Chile

BY: Simon Black

There’s a funny take on the Fiscal Cliff floating around the Internet that several of our keen subscribers have passed along. 

Like most things floating around the Internet, though, the details are inaccurate. So I’ve gone back and modified the parody with accurate numbers, and a bit more plot. What follows is 100% accurate based on 2012/2013 data: 

2012 US Tax Revenue: $2,469,000,000,000
2012 Federal budget: $3,796,000,000,000
2012 Budget deficit: $1,327,000,000,000
US Federal Debt as of January 18, 2013: $16,432,620,067,491
Total interest paid on the debt in 2012: $359,796,008,919
Budget increase/decrease between 2012 and 2013: $38,500,000,000 INCREASE

Now… chop off eight zeros and imagine the same numbers for the Jones family:

Annual Jones family income: $24,690
Annual Jones family expenses: $37,960
Annual Jones family shortfall borrowed from friends and neighbors: $ 13,270
Total interest the Jones family paid last year: $3,598 (at practically 0% interest)
Total Jones family debt (mortgage, auto, credit card): $164,326
Change in Jones family spending this year: ++ $385

Not to mention, Aunt Bertha, Uncle Ned, and Grandpa are all coming to live with the Jones family this year… which is only going to increase household spending. And little Johnny, who is about to graduate from university, has no job prospects.

Further, the Jones family hasn’t made any substantial changes to their lives… no jobs training, no skill development, no investment in education. Yet somehow they feel confident that their income levels will rise much faster than the debt.

Friends and neighbors who have loaned them money are starting to get nervous. But Papa Jones has put a plan together. He aims to cut the family’s annual shortfall… so that, five years from now, they’ll -only- be short $8,000 per year instead of $13,000. 
He also insists that, because his great-grandfather was a hardworking professional with an excellent reputation, that the neighbors should just cut him some slack. 

The extended family is also getting nervous… but Papa Jones tells them not to worry. They believe him because he is very charismatic and has a great jump shot.

A few projections:

1) The Jones family is obvious too ignorant to know that they’re bankrupt. This ignorance is even more dangerous than their insolvency.

2) The kids are going to inherit all of this debt, and if they’re lucky enough to find work, will spend the rest of their lives paying interest and supporting the rest of the family.

3) Friends and neighbors who have loaned money to the Jones family have had enough, and they are slowly beginning to reduce their exposure to this disaster. 

4) Papa Jones is going to deal with this by grounding his children, raiding their piggy banks, and sending them next door to fight the neighbor’s kids.

When you look at it this way, it really seems absurd. Yet it’s true… a slow motion train wreck that you can see coming miles away.

This is why the principles of international diversification are so important– you live in one country, your money lives in another, your business lives in another, you have an escape hatch in another, etc.

This ‘multiple flags’ lifestyle is a strategy that anyone can adopt. And it’s one of the best ways to avoid ending up like the Jones kids.