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Posted: 3/16/2013 4:04:22 PM EDT
Bank depositor haircut causes bank runs in Europe

People with the European equivalent of FDIC insured bank accounts will be taking a 6.75 percent haircut on all savings held in banks in Cypress. The latest Euro zone country that required a bail out. ATM machine withdrawals and electronic transfers are limited until after banks officially reopen. Their legislature will meet to approve these measures in the next few days and bank holidays may result until this is implemented.

I forsee bank runs in other EU countries in the coming days. Not sure the implications in the US.
Link Posted: 3/16/2013 4:11:58 PM EDT
6.75%, this time around.

Mattress banks, gold and silver buried in the back yard.

Does this include Swiss bank accounts owned by Cypriots?
Link Posted: 3/16/2013 4:15:50 PM EDT
Originally Posted By stevem1a:
6.75%, this time around.

Mattress banks, gold and silver buried in the back yard.

Does this include Swiss bank accounts owned by Cypriots?



My thoughts exactly.

Its like QE we were the first to do it here in the US then it starts to happen everywhere.
It wouldn't surprise me to see this start happening in more places and who knows how high they go next time.
Link Posted: 3/16/2013 4:34:33 PM EDT
Going to be an interesting next two weeks.

Fill your tanks.
Link Posted: 3/16/2013 5:01:44 PM EDT
6.75% is better than 100%.

Link Posted: 3/16/2013 5:24:43 PM EDT
Coming soon to a bank near you. I NEVER go above a certain amount in any of my accounts.
Link Posted: 3/16/2013 6:42:21 PM EDT
I've been pulling cash out of my accounts for months now. A little here a little there. Stashed in a safe place. Won't happen for awhile here, if it does at all, so start now.
Link Posted: 3/16/2013 9:23:46 PM EDT
This won't end well will it?
Link Posted: 3/16/2013 9:53:21 PM EDT
Europe's "G8" type protesters will be joined by average people (employed, above college age) and the riots could turn nasty compared to the dirty rock throwing hippie protests they're used to.

If the victims protest smart they'll go after the offenders' homes instead of government offices and bank branches.
Link Posted: 3/16/2013 11:12:22 PM EDT
This will only give Odumbo more ideas. It will be interesting to see how the markets react
come monday.
Link Posted: 3/17/2013 4:19:45 AM EDT
Originally Posted By stevem1a:
6.75%, this time around.

Mattress banks, gold and silver buried in the back yard.

Does this include Swiss bank accounts owned by Cypriots?


Above €100,000 - wins a 9.9% tax
Link Posted: 3/17/2013 4:25:47 AM EDT

Originally Posted By ilbob:
6.75% is better than 100%.




if your talking about gold seizure- that's unfounded

if you think its just 1 time, youre foolish
Link Posted: 3/17/2013 7:06:58 AM EDT
This is Cyprus. About like Argentina. It is a step or two above Zaire (or whatever it is calling itself these days).

The bottom line is the money was stolen and spent.

You can shuffle around money form other people to replace it but the money that is gone is just gone.

You can try and hide cash in your mattresses but that can go away just as fast when they have a cash change out day and you get 10 days to exchange your old paper money for new at whatever rate the authorities decide.

Precious metals are subject to being stolen or confiscated (really the same thing) so that is not an answer either.

Even buying land does not solve the tax problem as they can tax that and it is very hard to hide land.
Link Posted: 3/17/2013 7:22:27 AM EDT

those stupid russians.

ar-jedi
Link Posted: 3/17/2013 8:27:47 AM EDT
Most articles are glossing over the most important part... the first 100K euros was supposed to have the equivalent of FDIC insuarance through ECB...
THEY ARE LOSING SUPPOSEDLY INSURED DEPOSITS....
just proved that deposit insuarance is worthless in europe.

This would have been much less of a dangerous precindent if they had just skimmed unisured funds...
Link Posted: 3/17/2013 8:39:06 AM EDT
[Last Edit: 3/17/2013 8:58:28 AM EDT by ilbob]
Originally Posted By Orion_Shall_Rise:
Most articles are glossing over the most important part... the first 100K euros was supposed to have the equivalent of FDIC insuarance through ECB...
THEY ARE LOSING SUPPOSEDLY INSURED DEPOSITS....
just proved that deposit insuarance is worthless in europe.

This would have been much less of a dangerous precindent if they had just skimmed unisured funds...


when the insurance fund is broke like the government that backs it what would you expect to have happen?

what happens if you file an insurance claim against a bankrupt insurance company that does not have the reserves to back its policies? in some states there is some sort of insurance company collective that covers it but not always and not all states have them.

what happens if the company you work for has medical insurance that is either fully or partially self insured and they go bust? this is very common even in smaller companies and a lot of times it is not real obvious that you are relying on your employer to pay at least some part of the benefits of what you thought was an insurance plan from an insurance company. In fact, the potential cost savings make this a very attractive option for companies that are not in good financial shape.

I would bet that there is some fine print in the FDIC regulations that would allow this kind of thing here as well. Just because it has not happened before, does not mean it won't. They have bent the rules many times in the past to cover deposits that were not supposed to be covered at all, proving they really do not much care about the rules anyway. My guess is that the worst that would happen would be that you would not have access to some of your money for some period of time over a certain amount, but in a time of rip roaring inflation that might amount to a 10 or 20% hit.

In any case, we do not know the rules of the insurance plan the deposits were covered under. It may be that this is what it provides for. Keep in mind that very few insurance plans of any kind cover 100%. FDIC insurance doesn't either, it just cuts out at $100,000 entirely.
Link Posted: 3/17/2013 10:06:44 AM EDT
exactly FDIC covers up to 100k
They had the same kind that was supposed to cover up to 100k, so loses should have been fair game to excess depostis, but they are planning on hitting both
Link Posted: 3/17/2013 11:04:42 AM EDT
[Last Edit: 3/17/2013 1:09:34 PM EDT by EXPY37]
WHOOPS!



Changes in FDIC Deposit Insurance Coverage

--------------------------------------------------------------------------------

December 31, 2012
As scheduled, the unlimited insurance coverage for noninterest-bearing transaction accounts provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act expired on December 31, 2012. Deposits held in noninterest-bearing transaction account are now aggregated with any interest-bearing deposits the owner may hold in the same ownership category, and the combined total insured up to at least $250,000.






November 9, 2010
On November 9, 2010, the FDIC issued a Final Rule implementing section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that provides for unlimited insurance coverage of noninterest-bearing transaction accounts. Beginning December 31, 2010, through December 31, 2012, all noninterest-bearing transaction accounts are fully insured, regardless of the balance of the account, at all FDIC-insured institutions. The unlimited insurance coverage is available to all depositors, including consumers, businesses, and government entities. This unlimited insurance coverage is separate from, and in addition to, the insurance coverage provided to a depositor’s other deposit accounts held at an FDIC-insured institution.

A noninterest-bearing transaction account is a deposit account where interest is neither accrued nor paid; depositors are permitted to make an unlimited number of transfers and withdrawals; and the bank does not reserve the right to require advance notice of an intended withdrawal.

Please note that Money Market Deposit Accounts (MMDAs) and Negotiable Order of Withdrawal (NOW) accounts are not eligible for this unlimited insurance coverage, regardless of the interest rate, even if no interest is paid on the account.

For more information, visit: http://www.fdic.gov/news/news/financial/2010/fil10076.html

July 21, 2010
On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, which, in part, permanently raises the current standard maximum deposit insurance amount (SMDIA) to $250,000. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category. Consumers and bankers can find additional information regarding FDIC’s deposit insurance coverage through the use of the FDIC’s Electronic Deposit Insurance Estimator (EDIE) and deposit insurance publications located on the FDIC’s website “Are My Deposits Insured?” In addition, they can call the FDIC at 1-877-ASK-FDIC (1-877-275-3342).

Link Posted: 3/17/2013 11:08:32 AM EDT
Does your checking acct pay you ANY interest?


Link Posted: 3/17/2013 11:35:40 AM EDT
[Last Edit: 3/17/2013 11:39:12 AM EDT by buck19delta]
i could see the united states doing a version of this, when they finally have to come up with $$ and not credit.

they tax a 401k when you remove money, whats to stop them from moving the tax to right now, and claim not later, then do it later too? or instantly increase the tax to 50% for under $100k, and 75%, for over 100k? " for the children, or to pay your fair share?".....they have basically confiscated gold before to pay their bills, i would fully plan on them doing that again, to a much greater degree as so much money is easily tracked electronically, they dont even have to go to a bank anymore. pass a law, and send a letter to the bank, to transfer 10% of all savings accounts, straight to the irs.

IMHO not a dime that is in a bank, bank deposit box, retirement account, 401k, stock market or anywhere else, except buried in your backyard is totally safe from the gov. and even then, as was mentioned if they decide to redo the currency cause no one trusts it, and go to a new dollar, whats to keep them from offering you 1$, in new money for every $10, or $20, or even every $100 dollars of old money? were getting to a time where you should carefully consider " where", you keep your money.
Link Posted: 3/17/2013 11:50:19 AM EDT
[Last Edit: 3/17/2013 11:53:15 AM EDT by Orion_Shall_Rise]
Originally Posted By buck19delta:


IMHO not a dime that is in a bank, bank deposit box, retirement account, 401k, stock market or anywhere else, except buried in your backyard is totally safe from the gov. and even then, as was mentioned if they decide to redo the currency cause no one trusts it, and go to a new dollar, whats to keep them from offering you 1$, in new money for every $10, or $20, or even every $100 dollars of old money? were getting to a time where you should carefully consider " where", you keep your money.


nothing, which is why folks are choosing to store their wealth in lead, copper and rifles right now....
Link Posted: 3/17/2013 3:15:14 PM EDT
My savings accounts are empty. cash and hard goods.
Link Posted: 3/17/2013 3:58:59 PM EDT
It will be interesting to see how bad the bank runs are in Europe over the next few days. Don't forget, some of the "primary dealers" that the Fed uses to monetize the debt are US subsidiaries of foreign banks. What do you think will happen when a European bank has a run and their US subsidiary can run to the Fed loan window and get unlimited US dollars at zero percent interest? Yep, huge money printing. Problem is, that won't really solve the problem as the people over there want real cash. There will also be a huge spike in gold and silver prices as people use their now-at-risk-of-theft-from-above savings/checking accounts and buy precious metals. Realistically, that won't have much of an impact on the banking system since the sellers will deposit the money back in the same banks the buyers sent it from. Now when people take out their cash and stuff their mattresses with it, THAT will have a huge impact. Not only will their be a cash crunch, but the banks that are heavily leveraged will have to liquidate some things to cover the withdrawals (so, markets will tumble). And, they'll have far less money to lend to start and/or keep businesses afloat.

It will also be interesting to see if such a European bank run bleeds over to our shores. Confidence in the banking system isn't all that high right now to begin with. If the sheeple, currently in "graze" mode, suddenly decide "hey, that could happen here", and shift to "stampede" mode, well, then it's game over. It will be like the black rifle and ammo shortages only with cash. Followed shortly by either complete financial system collapse or, as in the case of Cyprus, a "bank holiday" that lasts until TPTB figure out what to do that will keep them in power the longest.

While the events in Cyprus are really small potatoes (unless you're one of the ones impacted), it could possibly be one of those "triggering events" that sets off a cascade of larger events that DOES impact us over here. It bears watching closely.

Oh, and as Gerald Celente (who got screwed to the tune of better than 6 figures from the MF Global fraud & failure) says, "If you can't hold it, you don't own it!". Make your personal financial adjustments accordingly.

Link Posted: 3/17/2013 5:02:10 PM EDT
Hi guys,

Some of you may recall the odd financial post from me some years back. I don't always take the popular view. I do try to present a bigger picture.

Here are some "truths" that apply to all things financial...

1) We need to save. Saving may have been historical, as in biblical, old testiment saving of some of the harvest and crops for next year. For those of you so inclined, the story of Joseph is an apt illustration. For those of you who aren't so inclined, its really quite simple: We need to somehow set aside some of today's harvest (money) for consumption either during the winter (our retirement) or during those inevitable challenging times that occur to us all ( job loss, medical bills, etc).

2) When we store our savings in banks and other financial institutions, we do leave ourselves open to some risk. Governments nearly always tax assets. And it's rare, but banks do fold, governments do confiscate citizen assets, and having money in an institution can mean you loose it. We make a little interest, or some capital gains, or dividends, but we sometimes can loose our principal.

3) We can bury our money - literally or figuratively - and it's always 'safe'. The government cannot easily tax it. Nor can they easily confiscate it. However, we d leave ourselves open to a different, more insidious risk: Inflation.

4) Inflation is a sneaky bastard. Your money is 'safe' in the mattress or buried in the backyard. The government cannot sieze it, so most of us feel secure about this sort of arrangemment. However, what we do not realize is the government is stealing it remotely, a little bit each day, without us ever really noticing it. You stick $1000.00 in a mason jar and bury it. We feel good because 12years from now we can unearth the jar, and there it is - $1000.00 in cold hard cash. We feel great - until we go to spend that cash an realize that this $1000 isn't worth anything like it was. Do you remember ten years ago when 500 round bulk packs of .22LR was $9.99 ($7.99 on sale)? Well, they are closer to $20 now. How much will the cost ten years in the future - $60??? The $1000 you buried in 2000 would have bought 100 bulk packs. In 2013 it only buys 50. In 2020 its quite possible that same $1000 wil only buy 20 such bulk packs. So the question is this: Was your buried money really all that well protected if it's puchasing power has eroded that dramatically...???

Here is the issue we face: When we place money in banks, it can be taken by a government. Hopefully our investments earn cash, in the form of dividends, capital gains, interest. And hopefully such earnings offset inflation. When we bury our cash, its hypothetically 'safe". We may feel better emotionally but the effects of inflation virtually guarantee our cash disappears slowly, without our knowing it. Its almost like a cancer that eats away at purchasing power.

You may want to bury your money. I can understand that However, keep a close eye on inflation, and carefully consider your future financial needs. Burying you cash pays miserable dividends, and almost certainly guarantees its loss. And the sort of economic conditions that force governments to sieze assets are the same conditions that usully make for hyperinflation.

Your best bet may be finding a way to reduce your need for currency altogether. Less need for cash means less susceptibility to devaluation, less impact if money is taxed, siezed or stolen. We've opted for debt free living. We keep expenses low. We need less cash to live. What cash we do have is converted to needed commodities (toilet paper, food, fuel) and stored. Again less susceptiblity to inflation. and yes, some is invested.

The back yard mason jar is great for a small emrgency stash, However, it virtualy guarantees poverty in the future. Find a grandparent neighbor, vet, anyone who has lived 20 or 30 years on a fixed income about the effects of inflation. They'll all tell you that inflation is a silent killer.

If you are sticking six figures worth of cash in a mattress or hole in the ground, it may feel secure, but be aware that the cancer that is inflation is slowly but surely consuming that nest egg. It is nice to have few thousand squirrelledaway somewhere, but you'd better have some serious cash actually invested somewhere and actuall working for you, making interest, dividends, capital gains and growing as fast or faster than inflation.

Link Posted: 3/17/2013 6:01:27 PM EDT
Originally Posted By frozenny:
Hi guys,

Some of you may recall the odd financial post from me some years back. I don't always take the popular view. I do try to present a bigger picture.

Here are some "truths" that apply to all things financial...

1) We need to save. Saving may have been historical, as in biblical, old testiment saving of some of the harvest and crops for next year. For those of you so inclined, the story of Joseph is an apt illustration. For those of you who aren't so inclined, its really quite simple: We need to somehow set aside some of today's harvest (money) for consumption either during the winter (our retirement) or during those inevitable challenging times that occur to us all ( job loss, medical bills, etc).

2) When we store our savings in banks and other financial institutions, we do leave ourselves open to some risk. Governments nearly always tax assets. And it's rare, but banks do fold, governments do confiscate citizen assets, and having money in an institution can mean you loose it. We make a little interest, or some capital gains, or dividends, but we sometimes can loose our principal.

3) We can bury our money - literally or figuratively - and it's always 'safe'. The government cannot easily tax it. Nor can they easily confiscate it. However, we d leave ourselves open to a different, more insidious risk: Inflation.

4) Inflation is a sneaky bastard. Your money is 'safe' in the mattress or buried in the backyard. The government cannot sieze it, so most of us feel secure about this sort of arrangemment. However, what we do not realize is the government is stealing it remotely, a little bit each day, without us ever really noticing it. You stick $1000.00 in a mason jar and bury it. We feel good because 12years from now we can unearth the jar, and there it is - $1000.00 in cold hard cash. We feel great - until we go to spend that cash an realize that this $1000 isn't worth anything like it was. Do you remember ten years ago when 500 round bulk packs of .22LR was $9.99 ($7.99 on sale)? Well, they are closer to $20 now. How much will the cost ten years in the future - $60??? The $1000 you buried in 2000 would have bought 100 bulk packs. In 2013 it only buys 50. In 2020 its quite possible that same $1000 wil only buy 20 such bulk packs. So the question is this: Was your buried money really all that well protected if it's puchasing power has eroded that dramatically...???

Here is the issue we face: When we place money in banks, it can be taken by a government. Hopefully our investments earn cash, in the form of dividends, capital gains, interest. And hopefully such earnings offset inflation. When we bury our cash, its hypothetically 'safe". We may feel better emotionally but the effects of inflation virtually guarantee our cash disappears slowly, without our knowing it. Its almost like a cancer that eats away at purchasing power.

You may want to bury your money. I can understand that However, keep a close eye on inflation, and carefully consider your future financial needs. Burying you cash pays miserable dividends, and almost certainly guarantees its loss. And the sort of economic conditions that force governments to sieze assets are the same conditions that usully make for hyperinflation.

Your best bet may be finding a way to reduce your need for currency altogether. Less need for cash means less susceptibility to devaluation, less impact if money is taxed, siezed or stolen. We've opted for debt free living. We keep expenses low. We need less cash to live. What cash we do have is converted to needed commodities (toilet paper, food, fuel) and stored. Again less susceptiblity to inflation. and yes, some is invested.

The back yard mason jar is great for a small emrgency stash, However, it virtualy guarantees poverty in the future. Find a grandparent neighbor, vet, anyone who has lived 20 or 30 years on a fixed income about the effects of inflation. They'll all tell you that inflation is a silent killer.

If you are sticking six figures worth of cash in a mattress or hole in the ground, it may feel secure, but be aware that the cancer that is inflation is slowly but surely consuming that nest egg. It is nice to have few thousand squirrelledaway somewhere, but you'd better have some serious cash actually invested somewhere and actuall working for you, making interest, dividends, capital gains and growing as fast or faster than inflation.



Risk is everywhere and there really isn't any way to avoid it.

Saving cash is a good idea to some extent, but far better is to eliminate debt. Having some cash in reserve to pay bills when your regular income dries up is good, but eliminating the bills is far better. Eliminating the bills lets the savings build faster without the debt service overhead, and when that regular income dries up you still don't have the bills so the cash you have saved will last vastly longer.

Taking cash out of the bank and hiding it is pointless as our "quantitative easing" effectively taxes every dollar everywhere by devaluing it (not the same as inflation really). The only good thing about QE is that it's essentially a flat tax on every dollar everywhere so it hits the rich just as much as the poor.

Precious metals may seem to be free of that effective taxation, however their true value is rather nebulous since those precious metals are used in jewlery, dentalwork and electrical contact plating and little else. In a SHTF situation there is little real demand for those metals and it's all a house of cards waiting for the first significant supplier of some commodity (food, fuel, etc.) to decide they won't accept those precious metals and instead demand something of more solid value.

Foreign currencies maigh be a decent idea if you expect the foreign country's economy to hold out longer and you expect to be able to spend that foreign currency. For those in the US that essentially means Canadian dollars, and that may be reasonable since as far as I know the Canadian economy is not nearly as in debt as the US economy, and they have a smaller population relative to their substantial natural resources which the rest of the world still wants.

Nothing simple or easy, but not a good idea to sit back passively and watch as one country after another's economy crashes... Argentina, Zimbabwe, Greece, Spain, Italy, Cypres, etc. all somewhere on the collapse curve, and some for quite some time with no recovery.
Link Posted: 3/17/2013 6:40:12 PM EDT
Its really only fair.











Link Posted: 3/17/2013 9:10:46 PM EDT
It really seems like the "cheap" ammo from ten years ago was the best investment.
Link Posted: 3/17/2013 9:53:45 PM EDT
[Last Edit: 3/17/2013 10:02:16 PM EDT by markg1117]
Link Posted: 3/17/2013 10:50:22 PM EDT
Originally Posted By buck19delta:
i could see the united states doing a version of this, when they finally have to come up with $$ and not credit.

Anything's possible, but
- we're not Cyprus, a tiny place beholden to a much larger union that controls their currency.
- US laws would have to be changed, which at a minimum would likely give us at least some time to put a stop to it

Originally Posted By buck19delta:
they tax a 401k when you remove money, whats to stop them from moving the tax to right now, and claim not later, then do it later too?

What's to stop them? Us, for one.

Also, in practical terms, they really couldn't tax 401k/IRA type accounts "right now" ... doing so would crash the stock and bond markets and destroy the very assets they were trying to seize. Simple thought experiment: how would it work? They decide that everyone owes a tax of 10% of the current (market) value of their 401k. Nobody has that kind of cash laying around, so everybody is forced to sell 10% of what's in the 401k to pay the tax. But everybody's selling ... so who's buying? Prices crash.

I've said it before here: US seizure of 401k assets is absolute pure fantasy. It can't work. An attempt to do so would destroy the asset the government was attempting to seize. These assets only have value because there are buyers. There will be no buyers of assets once the government starts arbitrarily seizing them.

Originally Posted By buck19delta:
IMHO not a dime that is in a bank, bank deposit box, retirement account, 401k, stock market or anywhere else, except buried in your backyard is totally safe from the gov. and even then, as was mentioned if they decide to redo the currency cause no one trusts it, and go to a new dollar, whats to keep them from offering you 1$, in new money for every $10, or $20, or even every $100 dollars of old money? were getting to a time where you should carefully consider " where", you keep your money.

Nothing in life is safe. You could get killed walking your doggie.

Choose your risk, and deal with it. At present, I prefer diversified bank and market risk over the inflation risk of cash. PMs? They've had decades-long runs of underperforming inflation.

But start with assessing real risks, instead of getting distracted by imaginary ones (like 401k confiscation).
Link Posted: 3/17/2013 11:08:26 PM EDT
[Last Edit: 3/17/2013 11:09:54 PM EDT by boltcatch]
Nothing is really stopping them from seizing all 401(k) funds. It's been openly discussed by the government since bozo got into the Whitehouse.

There is a very good chance it will come to that. Watch to see what they do with state/local gov't pensions first, that'll be a good indicator, assuming things don't fall apart too fast.


You can't really stress how much if a big effin' deal the Cyprus thing is. This is the EU violating the trust of insured deposits. This is HUGE. The Germans reportedly made an initial demand that the amount seized be 40%, not 10%. They're now floating the idea that the Italians should be hit with 15% - again, a one-off, "one time" deal. Getting robbed once doesn't make you any less poorer afterwards, of course.

No one - and I mean no one - is going to see an interest rate on an interest bearing account that keeps up with the real rate of inflation until after this is all said and done with, assuming there even are accounts afterwards. You won't even find one now. Rates are being kept artificially low, and once they start going back up the debt spiral is going to get biblical. The first to do it and start devaluing benefits the most, but once it starts, shit is going to get real pretty quick. Governments know this and are trying to ride it out as long as possible. In the meantime you get no more protection from inflation in your mattress than you do in your bank account, but you do gain some protection from nonsense like this.

Better yet not to store your wealth in their toiletpaper fiat currency in the first place. You need it to pay off the gov't (taxes, fees, licenses) and do a few things here and there, but otherwise you can minimize your use of it. Things that don't go bad that you know you're going to need and use don't inflate themselves away. The trick is getting the right balance of things so you're not lacking due to lack of liquid assets/cash.
Link Posted: 3/18/2013 3:56:10 AM EDT

Originally Posted By boltcatch:
Nothing is really stopping them from seizing all 401(k) funds.

well, nothing other than complete systemic crash of the US equities and bond markets, and withdrawal of foreign investment into the US, and that sort of thing. so, the primary methods of funding both capital enterprises and debt instruments would be gone, which would in turn DRASTICALLY decrease government income and working capital. you'll have to explain how that somehow benefits the people in power, or other people that want to be in power.

Originally Posted By boltcatch:
It's been openly discussed by the government since bozo got into the Whitehouse.

http://www.ar15.com/forums/t_10_17/642614_.html

1) links to currently pending house or senate floor legislation which either involves seizing of private 401k/IRA assets /or/ mandating a specific investment approach within a 401k/IRA?

2) links to proposed draft bills which either involve seizing of private 401k/IRA assets /or/ mandating a specific investment approach within a 401k/IRA?

3) links to any sitting or former senator's or congressman's platform page which is advocating seizing of private 401k/IRA assets /or/ mandating a specific investment approach within a 401k/IRA?

4) links to a white house executive order draft which either involves seizing of private 401k/IRA assets /or/ mandating a specific investment approach within a 401k/IRA?

5) links to direct quotes from any current or former member of the executive branch which either involves seizing of private 401k/IRA assets /or/ mandating a specific investment approach within a 401k/IRA?

6) links to IRS notices of proposed tax law change which either involves seizing of private 401k/IRA assets /or/ mandating a specific investment approach within a 401k/IRA?



n.b.
interestingly, the people warning that "the gov't is coming for our 401k's/IRA's, so i cashed out my 401k/IRA" –– well, they become benefactors of the redistribution system then. that is, the confiscated 401k/IRA monies are given to those who didn't have 401k's/IRA's in the first place, right? ergo, these folks should just stop the complaining about it, let it happen, and wait for their redistribution handouts. i don't know why they are even worrying about it, as it benefits them.

the only real downside to this "wait for it to happen" approach is that if it *doesn't* happen, you receive no redistribution handouts and you are on your own financially –– which you should have realized and planned for from the start.

ar-jedi


Link Posted: 3/18/2013 4:11:56 AM EDT
unfortunately there are a large percentage of preppers and similar minded people who get their financial and economic news from the alex jones types. it makes them vulnerable into being fooled that just about anything could happen.

Link Posted: 3/18/2013 5:29:10 AM EDT
Originally Posted By boltcatch:
Nothing is really stopping them from seizing all 401(k) funds. It's been openly discussed by the government since bozo got into the Whitehouse.

I was going to respond to this but ar-jedi beat me to it.

There are real things wrong with the world for us to worry about. Absolute tinfoil nonsense like this is detrimental to rational preparation for actual things that could actually happen in the actual real world.
Link Posted: 3/18/2013 5:37:31 AM EDT
Originally Posted By ar-jedi:
interestingly, the people warning that "the gov't is coming for our 401k's/IRA's, so i cashed out my 401k/IRA"

Maybe we should encourage these people. It's very altruistic of them to volunteer to donate money to the government by paying penalty taxes on those withdrawals and accelerate the income tax on the principal. If enough do it, the government would have all kinds of extra money to spend.

Me, I prefer NOT giving away a whole bunch of money to the government unasked.
Link Posted: 3/18/2013 2:05:57 PM EDT
While the likelihood of the .gov confiscating 401ks and the like is extremely remote (unlike in Argentina, Portugal, and Bulgaria where it has already been done), the likelihood of the .gov implementing a "one time wealth tax" against those 401ks is not so remote. An even more likely scenario is the .gov simply eliminating the tax deferred/tax free status on those accounts such that from x point on, you have to treat any gains as ordinary income. The fact is that any of these possibilities would likely crash the stock market and possibly the rest of the financial system with it. After all, if the .gov changes the tax status of these accounts, which they can do if they so choose, why would anybody keep their money there? So, there would be a massive withdrawal and massive dislocation of funds. The financial industry insiders wouldn't like that much so it's not likely to happen.

The fact is that as tiny as Cyprus is, the very notion that "insured" savings accounts are no longer sacrosanct will have a HUGE impact on the Eurozone. It may be enough of a catalyst to start bank runs (or the lesser bank "jogs") all across the peripheral countries like Italy, Spain, Greece, etc. which will exacerbate an already tenuous situation over there. If they run into a "Lehman moment" there, it will absolutely jump the Atlantic to here.
Link Posted: 3/18/2013 2:49:24 PM EDT
Originally Posted By planemaker:
While the likelihood of the .gov confiscating 401ks and the like is extremely remote (unlike in Argentina, Portugal, and Bulgaria where it has already been done), the likelihood of the .gov implementing a "one time wealth tax" against those 401ks is not so remote. An even more likely scenario is the .gov simply eliminating the tax deferred/tax free status on those accounts such that from x point on, you have to treat any gains as ordinary income. The fact is that any of these possibilities would likely crash the stock market and possibly the rest of the financial system with it. After all, if the .gov changes the tax status of these accounts, which they can do if they so choose, why would anybody keep their money there? So, there would be a massive withdrawal and massive dislocation of funds. The financial industry insiders wouldn't like that much so it's not likely to happen.


The money won't just disappear. The people with less than $40,000 may stick it in the their mattress, but for the rest? Most likely it'll go into real estate, creating another RE bubble.

Originally Posted By planemaker:
The fact is that as tiny as Cyprus is, the very notion that "insured" savings accounts are no longer sacrosanct will have a HUGE impact on the Eurozone. It may be enough of a catalyst to start bank runs (or the lesser bank "jogs") all across the peripheral countries like Italy, Spain, Greece, etc. which will exacerbate an already tenuous situation over there. If they run into a "Lehman moment" there, it will absolutely jump the Atlantic to here.


Why?

It's more likely that there will be an international flight to safety, and for all of our problems, safety still equals: The U.S.
Link Posted: 3/18/2013 5:56:47 PM EDT
Originally Posted By CostaRicaJones:
Originally Posted By planemaker:
While the likelihood of the .gov confiscating 401ks and the like is extremely remote (unlike in Argentina, Portugal, and Bulgaria where it has already been done), the likelihood of the .gov implementing a "one time wealth tax" against those 401ks is not so remote. An even more likely scenario is the .gov simply eliminating the tax deferred/tax free status on those accounts such that from x point on, you have to treat any gains as ordinary income. The fact is that any of these possibilities would likely crash the stock market and possibly the rest of the financial system with it. After all, if the .gov changes the tax status of these accounts, which they can do if they so choose, why would anybody keep their money there? So, there would be a massive withdrawal and massive dislocation of funds. The financial industry insiders wouldn't like that much so it's not likely to happen.


The money won't just disappear. The people with less than $40,000 may stick it in the their mattress, but for the rest? Most likely it'll go into real estate, creating another RE bubble.

Originally Posted By planemaker:
The fact is that as tiny as Cyprus is, the very notion that "insured" savings accounts are no longer sacrosanct will have a HUGE impact on the Eurozone. It may be enough of a catalyst to start bank runs (or the lesser bank "jogs") all across the peripheral countries like Italy, Spain, Greece, etc. which will exacerbate an already tenuous situation over there. If they run into a "Lehman moment" there, it will absolutely jump the Atlantic to here.


Why?

It's more likely that there will be an international flight to safety, and for all of our problems, safety still equals: The U.S.


Two reasons. First, a bank run in Europe will cause a "liquidity crunch" the ECB is ill-prepared to handle. Unlike the Fed that just prints more into existence because of our dollar being the world's reserve currency, the ECB is supposed to not be able to print money. The two other facilities that were created to support financial stability there have only a fraction of the cash required to staunch a real capital hemorrhage. As the the largely insolvent Euro banks teeter on the edge, they will liquidate massive amounts of anything they can, including their US investments, creating a dump in the US markets. Second, there is a tremendous amount of interplay between the US financial system and that of Europe. There are the Fed primary dealers that are US subsidiaries of foreign banks who also have access to the Fed discount window. In addition, a substantial portion of the financial derivatives are based on Euro financial "products" and indicies. So, if there is a Euro upheaval, this will be reflected in the triggering of some of these derivatives. The problem is, there are roughly $240 TRILLION in derivatives, 90% of which are held by the top 5 US banks. Only a small fraction of those have to fire off to sink one or more of them. So yeah, if Europe has a Titanic voyage, we're pretty much hosed, too.

Furthermore, there is unlikely to be a "flight to safety" in the US because of our tax policies and highly intrusive banking regulations. There will be a flight to safety, but the US won't be the destination.

Link Posted: 3/18/2013 10:49:07 PM EDT
Originally Posted By planemaker:
While the likelihood of the .gov confiscating 401ks and the like is extremely remote (unlike in Argentina, Portugal, and Bulgaria where it has already been done),

Except that's not true. It hasn't happened, which is one reason these conversations are so frustrating. People think it's been done before, in a way that's relevant or related to hypothetical confiscation in the US, but it simply hasn't.


The closest to what you're saying has happened or could happen in the US is what Hungary has done. It gave its citizens an ultimatum: they could voluntarily turn over personal retirement savings to the government, or their future contributions to the state-run plan would not further expand their entitlements. IOW, keep your money if you want, but your state benefits will be frozen at the level you've earned today.

Argentina: Had a government social-security-ish pension system, the management of which was pseudo-privatized at one point. It was recently re-nationalized to great publicity and wide freakout by people who characterized it as 'confiscation' but these were never individual, private accounts in the first place. Maybe bad news for the people who were counting on it, but privately held accounts with stocks, bonds, cash, or other assets were not affected.

Portugal: State pension funds were borrowed against to pay for stuff. Ie, exactly what the US has been doing with Social Security for a long time now. Doesn't make it right ... but this is not at all comparable to confiscating IRA or 401k.

Bulgaria: Attempted something akin to what Hungary did, except the amounts involved were so piddly small ($300 million total) that even outright overnight confiscation wouldn't have registered as a blip on the markets. They don't even belong in the conversation.



The only place you read about Obama stealing 401k assets are places like this, and "alternative news" sites that exist to sell advertising to gold and silver brokers.

Again: There are real things to worry about. This is not one of them, no matter how many times ZeroHedge et al say it is (and don't forget to buy gold from our advertisers).
Link Posted: 3/18/2013 10:56:02 PM EDT
Originally Posted By planemaker:
the likelihood of the .gov implementing a "one time wealth tax" against those 401ks is not so remote.

Yes, it is.

How would this work?

The government announces there will be a one time 10% tax on 401k/IRA assets, due immediately.

Nobody has that kind of liquid cash laying around. So simultaneously, everybody has to sell 10% of the stocks and bonds in the account. What does this do? It crashes the markets because everybody is selling (a lot) at the same time.

A 10% selloff may not sound like a lot, but with few or no buyers, it is. Market values would plummet far, far further than 10%. Would they settle 50% lower? 80%? Who knows, but they would stay there, because afterwards, nobody would deposit money in such accounts and invest this way.


Unless you subscribe to 'engineered destruction' tinfoilery where the purpose of such an action is a sinister plot specifically to destroy the markets and the economy, this can not and will not happen. As a maneuver to actually transfer wealth from citizens to the government, it can't work and can't happen.
Link Posted: 3/19/2013 3:46:49 AM EDT
Certain people in the Obama administration along with certain other socialists like Jesse Jackson has advocated for a long time using private pension money to "invest in infrastructure". It has gone nowhere because it would be so unpopular.

Really the only thing that stops the government from doing much of anything is how bad it is hated by the voters. If they get enough flak over something it goes away no matter how much they want it.
Link Posted: 3/19/2013 5:50:16 AM EDT
[Last Edit: 3/19/2013 6:05:03 AM EDT by Rich_V]
Here is a good summary of what is going on in the Cypriot banking crisis.

Link


What this should reaffirm to you all is how the handling of the crisis has only succeeded in heightening the risks associated with this current monetary order. The excessive amounts of debt have continued to grow and are clearly not sustainable. Policymakers have resorted to draconian methods of expropriating private sector assets (households, pension funds and corporates) either by excessive explicit ‘taxation’ and/or stealth taxation administered by a policy of negative real rates to help reduce the fixed real burden of debts.

It also reinforces our long-held views that when push comes to shove policymakers (the State) will escalate oppressive tactics against their electorate in a bid to maintain their status quo and that of their fiat currency system.

Of most importance is the adherence to retrospective changes of law and different rules for different people and countries. Insolvencies are generally well-defined in law. First equity, then subordinated debt, then deposits and senior bonds together, take the hit in that order. The creditor structure has been up-ended and more than merely tweaked over the last few years. I suspect with levels of ignorance high amongst populations they haven’t quite woken up to the reality that the state is not in fact here for your protection as it once was and that we all need to take on self-reliance and a heightened sense of responsibility for ourselves. Some notable rule changes of late are subtle but growing in number:

1) The ECB, holders of Athens-law and foreign law Greek debt all received different treatment
2) The Dutch didn’t restructure SNS Reaal paper, they confiscated it
3) The Irish banned lawsuits against the ultimate wind-down of Anglo Irish
4) Portuguese private pensions were confiscated

The list is long but you get the idea. Rule-changes are getting ‘regressively’ more creative and sinister. As a friend pointed out to me this as if the “football referee has gone from being a quasi-neutral arbiter, to pulling off his black shirt to reveal a Manchester United one underneath and awarding himself a series of penalties.”

The bail-out should have been a legal bail-in whereby equity is wiped out, and all bank debt is written down. Then unsecured (uninsured) depositors ie above €100,000 should have taken a double digit hit. By doing this EU finance ministers and lawmakers would have been respecting the creditor hierarchy while adhering and honouring the rule of law. The retrospective change of law is what should alarm us all. The insidious and subtle nature of this encroachment on our civil rights sets an ominous precedent and those who glibly mock libertarians for their ‘rants’ are no doubt those same people who thought PIIGS really do fly.


For all that say “It will never happen here” I would ask, what do you think the Obama administration will be willing to do when our profligate deficit spending finally has a day of reckoning?

Look at what was done to the long established rule of law when GM was taken over and the senior bond holders were no longer treated as senior. That was not done under a crisis where they could “claim” exigent circumstances, it shows how they think and act. So what are they willing to do if we have a real financial crisis? Say the 2008 crisis but this time without the ability of the fed to bail out the system with trillions in backstopped $$$?

Let me remind everyone what WE were willing to do the last time America faced a big crisis.

On February 19, 1942 FDR authorized the internment of 110,000 Japanese Americans with Executive Order 9066, which created "exclusion zones," from which "any or all persons may be excluded." It is estimated that two thirds (62%) of those interned were US citizens, many US born.

Typically they were given a few weeks’ notice to dispose of their real-estate (at tremendous fire sale losses) and most of their personal belongings. There were then placed in concentration camps without trial or charges for years.

It took until December 18, 1944 before the Supreme Court ruled that the exclusion process was constitutional (yes we can kick you out of your house, off your land) but you could not be detained without cause.

For their troubles the internees were given $25 and a train ticket when they were freed. It was not until 1988 that the surviving internees were given $20,000 each as compensation.

Go ahead and think that actions like the internment were an aberration of war, a fluke that will not be repeated.
Personally I have complete faith that when the SHTF we always revert to kind. Seeing who is in power now I am pretty sure what ‘kind’ they are.



Clarification, I'm not expecting the return of internment camps. I want you to think about what extremes our government was willing to go to when thing get bad, and how our current leaders may act given the need. Don't count on the rule of law or even reason to be part of the process.
Link Posted: 3/19/2013 6:32:14 AM EDT
Originally Posted By Rich_V:
For all that say “It will never happen here” I would ask, what do you think the Obama administration will be willing to do when our profligate deficit spending finally has a day of reckoning?

Surely they'll do desperate, crazy, horrible, maybe even evil things. And I think you're absolutely right about people 'reverting to kind' when life gets rough.

Originally Posted By Rich_V:
Clarification, I'm not expecting the return of internment camps. I want you to think about what extremes our government was willing to go to when thing get bad, and how our current leaders may act given the need. Don't count on the rule of law or even reason to be part of the process.

That's a fair assumption. It doesn't change the fact that there is no possible mechanism for wealth to be transferred from private 401k/IRA type accounts to the government without
1) crashing the markets overnight
2) destroying the value of what they're confiscating, rendering it pointless
3) and gutting future ordinary tax collections
To what purpose? It's lose, lose, lose for everyone involved.



Jesse Jackson might talk about how he wants to confiscate savings to pay for infrastructure, I don't know if he actually said that, but it sounds like the typical retarded nonsense he'd spit out. He might also talk about how he'd like to walk on the moon without a spacesuit. Just because those clowns say something doesn't make it possible.
Link Posted: 3/19/2013 6:53:09 AM EDT
Originally Posted By gasdoc09:
Originally Posted By Rich_V:
For all that say “It will never happen here” I would ask, what do you think the Obama administration will be willing to do when our profligate deficit spending finally has a day of reckoning?

Surely they'll do desperate, crazy, horrible, maybe even evil things. And I think you're absolutely right about people 'reverting to kind' when life gets rough.

Originally Posted By Rich_V:
Clarification, I'm not expecting the return of internment camps. I want you to think about what extremes our government was willing to go to when thing get bad, and how our current leaders may act given the need. Don't count on the rule of law or even reason to be part of the process.

That's a fair assumption. It doesn't change the fact that there is no possible mechanism for wealth to be transferred from private 401k/IRA type accounts to the government without
1) crashing the markets overnight
2) destroying the value of what they're confiscating, rendering it pointless
3) and gutting future ordinary tax collections
To what purpose? It's lose, lose, lose for everyone involved.



Jesse Jackson might talk about how he wants to confiscate savings to pay for infrastructure, I don't know if he actually said that, but it sounds like the typical retarded nonsense he'd spit out. He might also talk about how he'd like to walk on the moon without a spacesuit. Just because those clowns say something doesn't make it possible.


The part in red, you and I know what seizing accounts does to the system and would not take that road. Don't expect their actions to match our version of reason. Look around at some of the amazingly stupid actions taking place in first world countries and we are not even in an economic SHTF crisis.

From you name I assume you are an MD? Do you expect rational behavior from your patients when they are hemorrhaging from a severed limb?

Why would you expect the bad decision making we see now to improve when it gets really bad?

Get out of the 'normal' mindset where we can take time to plan and make decisions and get into triage mode. Then realize who will be doing the triage and what will be their criteria for who they save.
Link Posted: 3/19/2013 6:55:49 AM EDT
Originally Posted By markg1117:
Bank depositor haircut causes bank runs in Europe

People with the European equivalent of FDIC insured bank accounts will be taking a 6.75 percent haircut on all savings held in banks in Cypress. The latest Euro zone country that required a bail out. ATM machine withdrawals and electronic transfers are limited until after banks officially reopen. Their legislature will meet to approve these measures in the next few days and bank holidays may result until this is implemented.

I forsee bank runs in other EU countries in the coming days. Not sure the implications in the US.


This makes PERFECT SENSE...

The people of Greece have to put up something in order to continue to get these bailouts. I think it is reasonable for the people with deposits to 'put up' or simply shut the fuck up. They can't keep all THEIR money... and take Other People's Money. That's BS
Link Posted: 3/19/2013 7:03:07 AM EDT
Originally Posted By planemaker:
It will be interesting to see how bad the bank runs are in Europe over the next few days. Don't forget, some of the "primary dealers" that the Fed uses to monetize the debt are US subsidiaries of foreign banks. What do you think will happen when a European bank has a run and their US subsidiary can run to the Fed loan window and get unlimited US dollars at zero percent interest? Yep, huge money printing. Problem is, that won't really solve the problem as the people over there want real cash. There will also be a huge spike in gold and silver prices as people use their now-at-risk-of-theft-from-above savings/checking accounts and buy precious metals. Realistically, that won't have much of an impact on the banking system since the sellers will deposit the money back in the same banks the buyers sent it from. Now when people take out their cash and stuff their mattresses with it, THAT will have a huge impact. Not only will their be a cash crunch, but the banks that are heavily leveraged will have to liquidate some things to cover the withdrawals (so, markets will tumble). And, they'll have far less money to lend to start and/or keep businesses afloat.

It will also be interesting to see if such a European bank run bleeds over to our shores. Confidence in the banking system isn't all that high right now to begin with. If the sheeple, currently in "graze" mode, suddenly decide "hey, that could happen here", and shift to "stampede" mode, well, then it's game over. It will be like the black rifle and ammo shortages only with cash. Followed shortly by either complete financial system collapse or, as in the case of Cyprus, a "bank holiday" that lasts until TPTB figure out what to do that will keep them in power the longest.

While the events in Cyprus are really small potatoes (unless you're one of the ones impacted), it could possibly be one of those "triggering events" that sets off a cascade of larger events that DOES impact us over here. It bears watching closely.

Oh, and as Gerald Celente (who got screwed to the tune of better than 6 figures from the MF Global fraud & failure) says, "If you can't hold it, you don't own it!". Make your personal financial adjustments accordingly.


Well said. On another note, guess who has large deposits in Cyprus? The Russians...something tells me there will be repercussions.
Link Posted: 3/19/2013 7:04:45 AM EDT
I have no idea what the future will hold but just a couple of things to at least consider...

Rather than sell off all those IRA assets and cause major crashes of markets... what if the gov instead just took lets say a 10% stake in all those accounts and then used that to justify a massive dump of freshly minted currency.

Or another thought... what if the economy has already crashed and gov uses that as an excuse to take the action. Can't crash markets when they are already crashed and again instead of selling off all those individual 401k assets... what if the gov just turned those over to some major purchaser of our debt such as China as payment for erasing the debt the US owes them. WE might think no way China would take that as payment but hey... that would be far better than us defaulting on the debt. So in essence we all get hit with a 10 or 20% hit on our investments and in exchange the national deficit is erased and we get to start with a clean slate.

again, no idea what will happen but one thing is for sure... our debt is not going to be resolved in the traditional sense, it is growing way too fast for that now. It will take some drastic action or a default to solve it now. That will be happening soon too as we can't just keep printing money and absorbing the resulting inflation for much longer.

I think maybe a smart move is to take some of the investment and move it into tangable assets. Land with resources or metals or goods that appreciate in value seem more attractive than gambling on stock markets to me.
Link Posted: 3/19/2013 7:29:56 AM EDT
Originally Posted By gasdoc09:
I've said it before here: US seizure of 401k assets is absolute pure fantasy. It can't work. An attempt to do so would destroy the asset the government was attempting to seize. These assets only have value because there are buyers. There will be no buyers of assets once the government starts arbitrarily seizing them.


That's a very rational analysis.

Unfortunately, the government is anything but rational.

Link Posted: 3/19/2013 7:34:00 AM EDT
[Last Edit: 3/19/2013 7:35:09 AM EDT by ar-jedi]
Originally Posted By oldrock:
I think maybe a smart move is to take some of the investment and move it into tangable assets. Land with resources or metals or goods that appreciate in value seem more attractive than gambling on stock markets to me.

i don't get it.

under your plan the gov't seizes private financial instrument assets to repay trade debt with china -- but that same gov't doesn't seize private land, doesn't outlaw private ownership of metals, doesn't confiscate private goods including metals? moreover, they don't socialize the company you work for, and they don't socialize the distribution of food and staples? furthermore, the very fixed asset you are living in right now is not taken over for the community good?

really?

so they go to one extreme on individually held retirement assets, but leave everything else alone?

for effective fear mongering, if you are going to paint the sky black, you have to paint the whole sky -- and not just the part of the sky you feel has risk...

ar-jedi

Link Posted: 3/19/2013 9:56:04 AM EDT
[Last Edit: 3/19/2013 9:58:34 AM EDT by gasdoc09]
We disagree on the level of risk, ie the probability that confiscation of 401k/IRA assets could or will happen. OK.


So, you're convinced this is a non-trivial risk. What are you going to DO to reduce your personal exposure to that risk?

Cash out those accounts now? Take the 10% penalty hit and pay tax on the principal at your current marginal rate? Nice work, you just gave 1/3 or perhaps more of those assets to the government voluntarily, and they didn't even have to ask.

Leave your 401k/IRA as it is, but stop contributing? Put future money into ... what?
- PMs? They have had decades-long periods in the recent past where they did not keep pace with inflation. How will you spend it if the government regulates its exchange?
- Land? That's easily taxed. Kind of hard to move or hide it.
- Guns and ammo?
- Chewing gum? Nobody ever pays me in gum.

What's your plan, and have you changed it based on what just happened in Cyprus? Or is all of this anxious speculating just idle handwringing, and there is no plan?

I'll tell you exactly what my plan is: continue to annually max out contributions to my tax-advantaged accounts, and invest that money passively primarily in US and international stocks, bonds, with some (<10% of all assets) in gold. Savings I can't fit in those accounts go toward paying down mortgage debt, and some other alpha-strategy type purchases. Because among all the things I plan and prepare for, a boring life and long retirement is one of them, and I don't think I'd like the taste of cat food very much.
Link Posted: 3/19/2013 10:07:31 AM EDT
Originally Posted By WhyTanFox:
Unfortunately, the government is anything but rational.

Oh, on the contrary, they're exquisitely rational. Their event horizon may only go so far as the next election, but they're not Jokers. They won't set fire to it deliberately, just to watch it burn, because they would burn too.

Where do you think their assets are? (Hint: there's a reason their effective income tax rates are lower than working class Americans.)
Link Posted: 3/19/2013 10:32:11 AM EDT
Originally Posted By gasdoc09:
Originally Posted By WhyTanFox:
Unfortunately, the government is anything but rational.

Oh, on the contrary, they're exquisitely rational.

I was going to reply with "After CA and MD taxed their productive citizens to the point that they all fled, I really doubt that"; but after reading


Their event horizon may only go so far as the next election

I have to say I guess you're right.
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