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2019-09-11 11:25 by Karl Denninger
in Editorial , 278 references Ignore this thread
Heh Retirees And Pensioners....
[Comments enabled]

Are you a cop, firefighter, teacher or other employee with an alleged pension?

Oh by the way this doesn't just end with cops and firefighters, or teachers -- it applies to everyone who pays Social Security and Medicare taxes -- that is, everyone who works.

This man intends to kill you financially and perhaps personally.

 

Suppressing interest rates means your pension fund will go bankrupt with certainty.

Further, "negative interest rates" result in the inevitable destruction of capital (since you get back less than you put in by definition) which again, takes your previously-contributed pension funds -- whether through deduction from your check or by your employer -- and intentionally destroys it.

Finally, if you're an ordinary worker you pay FICA and Medicare tax.  These taxes by law are put into Treasury bonds.

Bonds that the President now demands the Fed literally destroy the value of on a daily and ongoing basis.

You have to be ****ing kidding me.  But you're not.  You're going to suck this up and get behind it, aren't you?  You're going to "like" it, right?

Our President has just issued a "request" that The Fed financially destroy virtually everyone -- 90+% of the American population -- and their retirement security.

And I bet every last one of you is going to sit back, pop another beer, or think that you can "vote your way out of this" in 2020 -- by voting for someone else who also promises you "free ****."

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Spaceace
Posts: 17
Incept: 2019-05-09

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Where is that bong hit emoji when you need it???


Click
Posts: 572
Incept: 2017-06-26

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Trump actually knows how this ends, and he has known for a long time. There comes a day and hour (nobody knows actually when the day and hour is) when the entire debt bubble pops, including both government debt and private debt. There is also going to be a total central bank failure; this also means a currency crisis.

Trump knows that the "full faith and credit of the United States" is total bull****. And, frankly, so are all of the public pension funds and most of the 401k plans.

As I've pointed out before: when money is bull**** managed by central bank bull**** artists (i.e., paper and digital backed by nothing but credulity) then the entire economic system turns into bull**** --- including the pension funds.

I'm still buying gold, silver and other hard money on the pullbacks. My mining stocks are only speculation which carries substantial risk. My crypto is minor speculation which carries even more risk. My US dollars are probably safe for now.

I thank Mother Nature that I have no money in pension funds.
Drifter
Posts: 329
Incept: 2016-02-11

Pacific Northwest
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The wages of sin: debters want to give savers the shaft, plus blow bubbles in asset classes, new and old (remember the creation of mortgage backed securities?) where people will flee to try to preserve capital.

I have always bet on deflation, but when the government is creating liabilities in way that that destroys the expectation that those liabilities are good as gold... maybe I've been wrong all this time and it is the other way around.

Negative interest rates-- oh man, there will be a whole lot of mattresses stuffed with cash.

I'm always looking for a way out, a way to beat the system and protect my capital... but there is no exit from this ride.
Tickerguy
Posts: 158977
Incept: 2007-06-26
A True American Patriot!
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@Drifter -- That is correct; there is no exit. There is only going through and choosing whether you're going to hold the people accountable -- or not.

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Winding it down.
Smacktle
Posts: 1961
Incept: 2009-01-20

Texas
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Trump is a knucklehead.

I guess it will be a good time to buy a house soon.

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The faults of the burglar are the qualities of the financier.
- George Bernard Shaw
Rollformer
Posts: 546
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Amendment 14: "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

So, you see, everything is going to be just fine. See no evil, and all that. </s>
Jfms99
Posts: 339
Incept: 2009-10-06

Msumelle, Ar
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Well I disagree on this all the way around.

Within the last few years I read Dr. Murray Rothbard's book, "The Case Against The Fed". Eye opening book and I highly recommend it.

Ten years ago what should have happened during the financial crisis was that we should have set up special bankruptcy courts and closed down the insolvent banks and insurance companies like AIG. Flushed all the debt out of the system, and Karl you were saying this as the man in the wilderness at the time.

I also think, as before the Fed came into existence, Interest rates should float and let the markets determine the true cost of money.

In reality Interest rates at this time should be between 6% and 8%, maybe higher, who knows, but certainly higher than at this time. 30 Year Treasury probably should be close to 8% possibly.

This can only lead to disaster.


Inline
Raftermanfmj
Posts: 4836
Incept: 2010-09-06

USA
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As a self-identified conspiracy theorist, Ive been of the opinion since day one that Trump was installed *specifically* to destroy and devalue the dollar, and remove it as reserve currency.

If you view his actions through this lens, they actually make a lot of sense:

1.******off allies to the point they make their own banking systems

2. Bully and******off Russian and China to where they do the same

3. Drive China into Russias arms

4. Constantly talk about how the dollar is overvalued

5. Spend money like a drunken sailor thats just been told he has 2 weeks to live

6. Threaten zero rates / NIRP

7. Continue wars that do nothing but bleed the Treasury

8. Wield the USD like a mace, beating European vassals and Asian competitors both with it.

Having the USD as reserve *requires* a current account deficit. Only when its devalued by 66-75% and dethroned in favor of (SDRs, The Bancor, Libra, who knows) can the US be competitive - by becoming a third world crap hole. So they think.

Been traveling recently? Every leftist controlled city is a literal **** hole, with falling infrastructure and no-go zones.

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I have never wished to cater to the crowd; for what I know they do not approve, and what they approve I do not know. - Epicurus
Oderint dum metuant - Caligula & Police State USA
Rollformer
Posts: 546
Incept: 2013-02-13

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@Jfms99: I have done some research, and it is my opinion that the natural rate of interest on the 10-year Treasury should be about 6%. Anything less, and assets, including housing, turn into a casino.
Aztrader
Posts: 8422
Incept: 2007-09-10

Scottsdale, AZ
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Saw this last night and he is a complete idiot. For the past 12 years, the Fed has kept rates down and the primary beneficiary has been wall street and real estate.
They pulled forward demand to the point that it now crashing. Look at the auto industry. Thousands of cars piled up going back to 2017 on lots. Even with zero auto rates or low rates, they can't sell cars because their prices are absolutely insane. They can discount a truck $15k and people still won't buy it because their payment will still be over $600 a month.
Does anyone think that if they brought rates to zero that bankers would lower credit card rates? This fool keeps talking about no inflation. What a crock of crap. My health insurance just popped another $200 a month to $1k. I know our parents never had to pay bills like this.
Trump is panicking about the market dropping. He actually must be pretty stupid to think his base really cares. He is toast in 2020.
Tat668
Posts: 3378
Incept: 2007-09-09
A True American Patriot!
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POTUS wants a limp one, but it may be a stiff one being serve up.

Looks like the 10Y low held, shooting for the 50sma. Will it be a mere kiss back of rocket launch; we'll get the answer before Christmas?!

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"This marks the beginning of the end."- Barack Obama 2-26-09

"Every rock we turn over, every time we looked for it, it's not only there, it's worse than we anticipated."
Bill Priestap, FBI's counterintelligence division
Raftermanfmj
Posts: 4836
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USA
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I guess it will be a good time to buy a house soon.

Eye-roll. Yes, thats just what you want; a fixed piece of property that they can ratchet up the property taxes on year after year after year to try to keep the public pensions solid. And of course the utilities will spiral up faster than any rate of inflation.

Debtors want to give savers the shaft

Read an argument years ago that all human economic conflict isnt right vs. left but really, savers vs. spenders.

...and then we can get into k-selected an r/K selection theory as a subset of that.

Id think a free-market in currency / money would make things more honest...competing local / national currencies.

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I have never wished to cater to the crowd; for what I know they do not approve, and what they approve I do not know. - Epicurus
Oderint dum metuant - Caligula & Police State USA
Flappingeagle
Posts: 3233
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Must.kick.can.one.more.time.

I am with you guys, this ends in disaster and there is no dodging it. Everyone is standing behind the manure spreader, they just don't know it yet.

Flap

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Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave the Rat Race to the rats...
Smacktle
Posts: 1961
Incept: 2009-01-20

Texas
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Rafter, didnt think I needed to put a "sarc" tag there lol.

I'm all in on bobbleheads and sports trading cards.

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The faults of the burglar are the qualities of the financier.
- George Bernard Shaw
Ktrosper
Posts: 3505
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ft collins co
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Your post, not his..

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The unexamined life is not worth living.-Socrates
The only stable state is the one in which all men are equal before the law.-Aristotle
Liberty exists now in the spaces government has not yet chosen to occupy.-Doc Zero
I anticipate that 10 Dallas Cowboys Cheerleaders will blow me this evening.-K.D
Tdurden
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I think we should encourage these ass-clowns to take the worst possible decisions to auger this bitch into the ditch as soon possible. Just get this **** over with. If I have to rebuild, I'd rather do it now. It's not like I'm getting any younger.


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"I'd like to live just long enough to be there when they cut off your head and stick it on a pike as a warning to the next 10 generations that some favors come with too high of a price." -Vir Cotto Babylon 5
Gonewest
Posts: 131
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PacificNW
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I think Trump may have finally figured out he will be blamed for the crash and is now making great efforts to create a scenario where he can blame the Fed for the crash.

Reacting this way may be evidence that Trump feels cornered. If he wins re-election, he's going to be president during the crash. If he loses, which is looking more likely, he will be blamed by the Dems for the crash.

The second option may be better for everyone because it's likely to bring the event window closer as the Dems will want to crash the economy early in the presidential term in order to pin it on Trump rather than whomever is president at the time. Remember Obama blaming Bush for the crash.

In any case, the sooner we crash, the sooner we can rebuild.
Emupaul
Posts: 57
Incept: 2013-04-17

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I have money in a credit union because (a) it's a PITA to make a withdrawal and (b) it's my stash for when I need to have the water well replaced. I can't fritter it away on stupidity.

It's safer there than in a zip-loc bag taped under the kitchen sink. Just in case of burglary or fire. I'm losing value because of inflation. If they go negative on the interest, I'm closing the account and I will "bury the cash" somewhere. Still losing value but not paying them to store it.

I just thought of the kitchen sink thing. Though, I'd seal the cash in a FoodSaver bag... in the bottom of the deep freezer... in a package of freezer burned veggies. :)

My 401k? I don't know. Pull the max at the lowest possible tax rate when I'm eligible and stash that into cash. I have a plan.... not saying it's a good plan.


I trashed a Pre-Approved Creditcard offer from Citibank a few days ago. How much was I pre-approved for? Don't know, I have to go on-line to complete the application. So much for "pre-approved". But it sounds soooooo sweeeet!!!! Zero interest on balance transfers for a year! No annual fee! Cash back, too!!!

Yeah, and 24.5% interest on a balance plus $39 for a late payment.



Themortgagedude
Posts: 11186
Incept: 2007-12-17

Saint Charles MO
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KD - if they don't take rates to zero the budget blows up. If they do pensions blow up and thus the budget blows up. This ain't Trumps fault. It started with LBJ. Reagan was a big part of it. 43 blew a hole in the budget. Obama did as well.

The only reasonable hope we have left is to solve the healthcare costs. But that won't even be enough. If they save money there they'll spend it somewhere else.

We might as well plan for what happens after the explosion that's coming.

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I think its time we ask ourselves if we still know the freedoms that our founding fathers intended for us. Ronald Reagan 1964
Tickerguy
Posts: 158977
Incept: 2007-06-26
A True American Patriot!
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Death

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Winding it down.
Asimov
Posts: 111897
Incept: 2007-08-26

East Tennessee
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Quote:
Negative interest rates-- oh man, there will be a whole lot of mattresses stuffed with cash.


Don't fret, that won't be a problem. They'll just put expiration dates on it.

And of course the "old style" money will only be accepted for a short period of time. And only in "reasonable" amounts. Not big enough or long enough for the billions in drug dealer hands to be exchanged. Or yours.

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It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Ebt
Posts: 6
Incept: 2018-12-22

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To think what kind of an option gold is, I always use 1964, right when the quarters started having a copper strip in the middle

Gallon of gas was $.20 (175 gals of gas / oz of gold)
Candy bar was $.05 (700 candy bars / oz of gold)
Gold was $35 / oz

Today, gallon of gas = $2.70 (here in Boston) and candy bar = $1

So gold should be 175 x $2.70 = $473 in terms of gallons of gas
Or gold should be 700 x $1 = $700 in terms of candy bars

$475 - $700 is the deflationary crash price of gold

Veeger
Posts: 66
Incept: 2013-02-13

Washington state
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I about fell out of my chair when I first saw this. Yeah, I know. Europe is already there so I guess the T-man figures they're surviving so far. But this isn't the first time he's assaulted our financial world. Calling for ever lower interest rates from the Fed (heck, they should be raising rates to something a bit more realistic--since they think they know so much). The talk of devaluing the dollar gives me shivers too.

So... D or R, I see several hands in my pocket. I just tell myself, "Well, TODAY wasn't too bad a day here where I am...." but

'Living happily ever after' seems progressively less and less likely....okay, it hasn't been very likely for a long while.

Taking it one day at a time.
Lobo
Posts: 641
Incept: 2013-12-25

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Quote:
To think what kind of an option gold is...


What do you do if the gooberment declares it illegal for Americans to hold gold? They've done it before.

You could run it across the border and sell it (if it is still legal there), but there is no guarantee that you would make it back across the border with your cash and, even once you're in the US, you could be "asset forfeitured" down to your underwear.

The ship is sinking and everyone is looking for life boats. The problem is that all the life boats have holes in them. The best path forward is stopping this **** peacefully now, before things really go to hell.

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Village Idiot
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