Gyroscopic Investing

We are all accutely aware that the 35 to 1 leverage currently enjoyed by our Nation will never be repaid in this fairytail fiat experiment.  Along the way to the cliff, however, do we expect more nurturing and nannying from TPTB encouraging us to be more patriotic in suggesting that our IRAs, Pensions or other retirement accounts be narrowly defined/confined under a few "qulaified" investments, such as T-Bills and T-notes.  Or, as we progress faster to the edge of default, do we truly antcipate an outright confiscation?

Well, is there any wise among us who has decided to cash-out of an IRA, take the hit w/ fees & taxes, and roll all into non-retirement accounts?  If so, how was your decision reached and would you make the same decision in hindsight?  I have approx 37% of my liquid assets in Roth, IRA and SIMPLE Plans.  I am considering this in tandom with plunging all in the PP.  Currently, 100% in cash, even in the retirement accounts.

Pardon me if this issue has been previously discussed - please link me to the thread if possible. 

Plumbline wrote: We are all accutely aware that the 35 to 1 leverage currently enjoyed by our Nation will never be repaid in this fairytail fiat experiment.  Along the way to the cliff, however, do we expect more nurturing and nannying from TPTB encouraging us to be more patriotic in suggesting that our IRAs, Pensions or other retirement accounts be narrowly defined/confined under a few "qulaified" investments, such as T-Bills and T-notes.  Or, as we progress faster to the edge of default, do we truly antcipate an outright confiscation?

There is no proposal out there right now to provide any mandatory investment of retirement plan assets in any type of government bond.

The only proposals out there are to provide a government bond with annuity-like characteristics as an option under some types of plans.

Frankly, as a PP investor I would LOVE to have the option of buying LT treasuries in my retirement accounts.

There is a lot of noise out there over this topic right now.  Before triggering an unnecessary tax liability, plus the early withdrawal penalty, please look into the matter more closely before deciding what is best for you.

I make my living working with retirement plan design and compliance issues.  All I can tell you is that from my perspective, this topic of retirement plan confiscation/mandatory investment in government bonds is a tempest in a teapot. 

Does anyone REALLY think that Wall Street and the Fed would sit by and let the government move money out of all those equity mutual funds into treasurys?  Think about what that would do to the stock market.  What kind of politician or bureaucrat would be in favor of something like that, especially when the government has demonstrated its ability to raise as much money as it wants through other channels.  Politically, it would be DOA.

While I wouldn't rule out confiscation at some point, I don't think it is likely.  Note also that one of the main tenants of the PP is that we can't reliably predict the future, or when our predictions will become reality.  In addition, if the government wants your stuff, they can take it no matter where you have it invested (gold being a possible exception). 

I would strongly recommend against making costly changes to your investments based on the possibility of something happening in the future.

Pkg Man wrote: I would strongly recommend against making costly changes to your investments based on the possibility of something happening in the future.

Amen.

As far as I can tell, the movement to nationalize 401ks is the brainchild of a one woman front, one Teresa Ghilarducci, who spoke before Congress one time in 2009, and the sensationalist media has just absolutely run this into the ground and continues to beat this dead horse.  Much ado has been made of the fact that the presentation wasn't well publicized at the time, and people are clamping their tin foil caps down tightly.  The last time I checked however there's no legislation penned to do so, and if there is, does it have any cosponsors?

I have to tell people constantly to not base their decisions on "might happens”?, to be reasonable, and to understand the risks of any decision.  A lot of people for instance made some moves to realize certain kinds of income or gains in the last year or two due to the writing on the wall when Obama came into office.  That was likely prudent, but it was done with aplomb and caution, not to mention acceptance of the consequences of being incorrect, in nearly all cases I’m aware of.

Everyone is a geopolitical economic analyst who knows that the world’s going to hell because of Peak Oil or hyperinflation or global terrorism or whatever it is this week, and it’s not that these aren’t serious problems, it’s just that they’re completely unpredictable problems as their interaction produces a chain of events so complicated no one can understand them, except for “you”? of course, “you”? have got it all figured out and the rest of us are idiots for not filling our basements with gold bars and MREs, and I say this as somebody who aspires to off grid living and maintains thousands of rounds of ammunition in reserve.

Now I do respect that some people do not maintain tax advantaged accounts for the reason they feel it’s their money and they want more control over it, but that’s different.
Now that said, here’s my (worthless) prediction.  I think what you will see is stricter means testing for various government benefits, like Social Security, which will consider the value of your retirement accounts in more exaggerated and punitive ways as one way of coping with the out of control spending. 

I do believe with all my heart that I will pay a fortune into the Social Security system that could have been better spent or invested however.  There's plenty to complain about without resorting to speculation.

pplooker's post above is really outstanding.

It's what analysis looks like when fear is replaced with rationality.