From: The International Forecaster, February 25 2009
Since 1997, real inflation, as opposed to ridiculously understated official inflation, has raged at a minimum of 8% annually, and has soared as high as 14-16%. This means that you have lost a minimum of two thirds of your 1997 purchasing power. So, if you invested $10,000 in the Dow components in 1997, not only would you have no gain whatsoever, you would have losses on the stocks which were dropped from the index due to poor performance and, in addition, to add insult to injury, your purchasing power has been reduced from $10,000 to approximately $3,000 in terms of 1997 dollars. In other words, that $10,000 you invested in 1997 will today only buy what $3,000 would have bought in 1997.
Effectively, anyone playing the general stock markets has been wiped out by this combination of lost capital gains and reduced purchasing power. Those who began investing after 1997 have done even worse because they have suffered major capital losses in addition to having suffered reduced purchasing power. So much for the much touted 10% average annual gains for stocks. By contrast, you could have bought gold in 1997 for about $300 per ounce and more than tripled your money at today’s prices. Your $10,000 would have become $30,000+, however, due to inflation caused by the Fed’s profligate increase in the money supply, which the Fed intentionally orchestrated in order to impoverish you and bring you to your knees so you will accept world government, your purchasing power would only be about $10,000 in 1997 dollars. So you would at least be even in terms of purchasing power. Certainly, $10,000 in purchasing power is a whole lot better than $3,000. This example is a classic illustration of how gold preserves your wealth. As you can see, failure to invest in gold, silver and their related shares is tantamount to committing financial suicide. The bankruptcy courts will soon be full of the tens of millions of US citizens who ultimately will ignore gold and silver as a safe haven, or who will simply lack the capital to invest in gold and silver in any case because they are in hock up to their ears, or because they have become unemployed, or both.
Pension plans, often heavily invested in stocks and real estate, asset classes which have seen tens of trillions of dollars disappear in a matter of months, are now so far behind in funding due to their ludicrous underlying assumptions about ROI (return on investment) that they are effectively bankrupt and will have to be bailed by the grievously under-funded PBGC (Pension Benefit Guaranty Corporation), which of course can only provide pennies on the dollar unless another bailout is orchestrated to save middle class pensions, which is not going to happen, and these losses do not even take into account loss of purchasing power due to inflation, which is understated officially to screw retirees out of their social security benefits. Instead of a PBGC bailout, we more likely will see the US follow in the footsteps of Argentina by nationalizing private pension money, mixing it with government entitlements. If you were wondering where the elitists plan to park a large portion of those new treasuries being issued to fund all the bailouts, look no further than your IRA’s, 401(k)’s and your company pensions, which will be forced to purchase these treasuries as part of the process by which the elitists will nationalize your pensions. Also, as part of this process, the types of assets you are allowed to invest in will be greatly limited, and your pension will be overseen by your corrupt, bungling government, insuring a complete financial…. That way, you get the unspeakable privilege of owning dollar-denominated paper assets that will be vaporized along with Federal Reserve notes (aka toilet paper, aka “worthless paper”) when foreign owners of dollar forex all head for the exits to see who can dump their dollars the fastest as they try to purchase as many tangible, real assets as they can find in the US. You won’t know, of course, because statistics about foreign ownership in the US are, conveniently, no longer published by the FTC. However, you will find out soon enough as you are Zimbabwe’d and Weimar-ized. And that only addresses problems due to devaluation of the dollar. Wait until the interest rates skyrocket as hyperinflation takes hold and risk reaches new heights. This will collapse the treasury market, and the value of all your pension plan assets, which the government will have forced you to invest in treasuries, will go down in flames with it.
Also, many pension-sponsoring companies are going to go under because they are being systematically starved of necessary capital by the big, so-called “legacy banks,” who are using the financial debacle to eliminate their competition and that of their fellow elitist business corporations, especially transnational conglomerates. When these victims of the financial holocaust go under, the pension funds they sponsor will go under with them and there will be precious little in the way of bailouts to make up for these losses. Rest assured that the elitist companies will get their equity injections, toxic waste buyouts and loss assumptions, while everyone else gets the shaft. This is what the Pelosi Political Pork/Plunder Payoff Plan is all about, as well as the multi-trillion Obama bank bailout, which supposedly will help Main Street in addition to Wall Street, based on the tiresome platitudes offered in Tuesday’s presidential speech. If you believe that, then we still have that bridge in Brooklyn for sale at pennies on the dollar, at least until one of the dollar surplus nations uses its hundreds of billions in dollar forex to gobble it up.
Note that all the new tax laws concerning pensions encourage you to put more money in, and to keep it there longer. The scum in our government and on Wall Street want to encourage you to place your money into accounts to which they have strings attached with onerous tax law penalties. They want to make sure you put as much of your hard-earned savings in such accounts as possible, and to keep it there as long as possible, so they have sufficient time and opportunity to steal it from you via inflation, dollar devaluation, insider trading, investment fraud, depreciation of asset values through deflation, direct taxation, foreclosure sales, bankruptcy auctions and outright confiscation. That is with the assistance of the SEC and CFTC.
There is no end in sight for the real estate market, which will not bottom for several years. Once interest rates go into double digits, option ARM’s implode and unemployed government employees bring the overall unemployment rate up to 30% or even higher, we could be looking at a roll-back to 1981 home prices. Once these three factors are in full swing, you won’t be able to give a house away. No one wants to buy a home that is plummeting in value, few will be able to afford it even if they did want to buy it, and the few remaining who wanted to buy it and were still able to afford it will not have the credit or down payment money that is necessary to obtain a loan to buy it. Bank sales of foreclosed property will dominate the markets at all levels, and in all geographic areas. Few areas in the US will be spared from drastically declining home values. Also, once deflation takes over during the next one to three years, those who are liable under those big mortgages they took out based on inflated real estate prices will be unable to sell in any case, because they will be underwater and unable to clear their liens. If we get cram-down authority for our bankruptcy judges, where loan balances can be reduced to levels commensurate with value, there will be few if any homeowners who are drastically underwater who will not take advantage of this bankruptcy protection whether or not they can swing the mortgage payments. No one wants to pay more for a home than it is worth. That means that virtually all real estate derivatives could become worthless regardless of quality. That also means that all the large banks are hopelessly insolvent even if we set aside the Quadrillion Dollar Derivative Death Star waiting to implode as ongoing business failures set off counter-party liability on credit default swaps (CDS’s), and as double digit interest rates fry those on the wrong side of interest rate swaps (IRS’s). Therefore, all money thrown at these zombie financial institutions is not only being wasted, but is also stoking further hyperinflation without generating any offsetting benefits whatsoever in return. In addition, any common stock, preferred stock or bonds given to taxpayers by any of these walking dead elitist banks and financial institutions is absolutely worthless. ….
These bankster gangsters then have the gall to say they are not accountable to taxpayers as to how the money is used, while glomming salaries, bonuses and dividends out of money that has been handed to them which they did nothing to earn, and some of this money is even used as takeover money to hostilely acquire the honest, healthy banks in order to eliminate competition while simultaneously hoarding the gifted bailout money to force the rest of their competition to fail and go under because they can’t borrow to meet their capital requirements. Obama’s bogus promises that these horrendous and fiendish practices will not be allowed to occur with respect to future bailout funds is just window-dressing and inane platitudes for the ignorant masses. Business will go on as usual in Washington and on Wall Street — as corrupt as ever. Right has become wrong, and wrong has become right, just as the Bible warned. Surely, we are in the End Times.
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