Rick Ackerman is a very bright guy. I have followed his work for a long time and though I don’t embrace his deflationary views, I look forward to what he has to say. In the first paragraph of his article “Has BP Summoned the Fires of Hell?” his views are basically the same that you find on these pages every day. But the rest of the article was enough to shake me up this morning. We don’t know how this will play out, but if it plays out “badly” then all of our talk about investments and politics will be the least of our worries. I have inserted his article here, in the front of the Daily, because it is interesting, and potentially the most important topic that I have written about, to date.
Has BP Summoned the Fires of Hell?
by Rick Ackerman
We’ve railed at traders and speculators recently for their arrogant and sometimes breathtaking stupidity in failing to discount an onslaught of world-shattering news. If the dolts, rubes, bozos and mountebanks who have kept stocks afloat even remotely understood what has been going on in this world, we wrote here recently, the Dow Industrials would plummet 6000 points in mere days. And the news has been grave, indeed. America’s wholly imagined economic recovery died for good on Friday with the release of shocking retail figures for May. Household incomes have been falling, consumer credit imploding, M3 plummeting, and now it turns out that corporations have allowed $1.8 trillion to sit idle in low-yielding bank accounts, hastening the economy’s deflationary collapse and the onset of a Second Great Depression. We face the impossible task of getting out from beneath $130 Trillion of debt and liabilities amassed by government at all levels. The nation is adrift under a weak president whose radical politics have sharply divided the voters. Iran and Turkey (a NATO member!) have declared war on Israel, sending warships to run the Gaza blockade. Europe’s financial house of cards is within months, or even weeks, of total collapse. The Jihadists may be turning the tide against U.S. and British forces in Afghanistan.
Unfortunately the list does not end there. For in fact, there is one crisis that greatly overshadows all of them: the seabed irruption in the Gulf of Mexico. We won’t even pretend any longer that there is a market “angle” to this story. In fact, the markets are a side show, and politics a droll burlesque, in comparison to the geophysical dreadnought taking shape in the Gulf. Because it could eventually threaten all life on this planet, there may be no “investable issues” here.
The problem is no longer a leak or a spill, you see, but a volcanic gusher – one that appears to be defeating the efforts of the most capable petroleum engineers in the world. More and more, it is looking like a sci-fi disaster film with no hero and an unhappy ending. Even our supposed best hope for containing the gusher – a second well that would intersect and plug the leak by sometime in August – may be doomed to failure, since the well casing itself may be too damaged to seal off. But the scariest story currently making the rounds is that there are fissures springing up all over the seabed, and that if the weak bedrock that holds the oil gives way, it will release a quantity of hydrocarbons greater in volume than the Gulf itself.
Whenever we’ve tried to predict the “black swan” event that might eventually send the U.S. and global economies into deepest coma, we believed in our heart that, no matter what happened, everything would turn out all right. The real estate market might collapse, taking our standard of living with it, but Americans would somehow get through hard times together and emerge better and stronger for it. Even the prospect of a nuclear conflagration in the Middle East implied a beginning and an end – a radioactive half-life, as it were.
Who could have imagined that there was an even bigger disaster lurking – or that mere human error could trigger a cataclysm of seismological proportions? Or will it be of Biblical proportions, with rivers and seas turned into wormwood? Has BP tapped, not an oil well, but a hole into volcanic Hell? While these questions are almost too frightening to contemplate, the answers may be staring us in the face within months or even weeks. For the moment, though, it has become difficult to sort out fact from fiction. Are clean-up workers getting sick from toxic hydrogen sulfide fumes? Is the Obama administration covering up the true magnitude of the crisis to avoid a panic? Why are nearly all of the satellite photos of the spill on the Web a month old? Can BP really handle a crisis whose costs may soon mount into the trillions? Is the problem even solvable?
Two of my friends called in the past few days and were concerned about their gold and silver held in IRAs. They have heard rumors the government was considering legislation that would force holders of 401Ks and IRAs to sell their portfolios and invest the proceeds into government bonds. It is not all that far fetched. Jim Willie wrote, The goal is to induce people to invest their 401k and IRA funds into designed annuities, or else basic US Treasury Bonds. “Never lose sight of the fact that US T-Bonds are the biggest overvalued bubble in world history, after the global housing and mortgage bubble. The US Govt must sell $2 trillion in bonds this year alone, and foreign demand has almost vanished. China does not want them. Pension funds do not either. So the American citizenry will be coerced into investing their pensions in subprime sovereign bonds, the US Treasurys.”
Willie (Hat Trick Letter) discussed this issue thoroughly in his latest newsletter. Here are his comments.
FORCED CONVERSION OF I.R.A. AND 401K PERSONAL RETIREMENT ACCOUNTS INTO US TREASURYS IS BEING CONSIDERED. THE PROGRAM IS PROMOTED BY THE US DEPT TREASURY AND US DEPT LABOR, WITH HEAVY SUPPORT BY THE ROCKEFELLER WING OF THE SYNDICATE. LEW ROCKWELL REPORTS.
An important initiative is gaining ground slowly and quietly to force 401k and IRA accounts into a US Govt nationalization. In past reports, my sources indicated that bank Certificates of Deposit would be forced into US Treasurys, by means of the FDIC insurance pressure. The precursor might be the retirement accounts. The angle is similar, with favorable tax treatment. The Lew Rockwell Institute is stout and intrepid in their reporting. The US Dept Treasury and US Dept Labor will request for public comment on ways to promote the conversion of 401k savings and Individual Retirement Accounts into annuities or other steady payment streams. The initiative is spearheaded by Asst Labor Secretary Phyllis Borzi and Deputy Asst Treasury Secretary Mark Iwry. The goal is to induce people to invest their 401k and IRA funds into designed annuities, or else basic US Treasury Bonds. Never lose sight of the fact that US T-Bonds are the biggest overvalued bubble in world history, after the global housing and mortgage bubble. The US Govt must sell $2 trillion in bonds this year alone, and foreign demand has almost vanished. China does not want them. Pension funds do not either. So the American citizenry will be coerced into investing their pensions in sub-prime sovereign bonds, the US Treasurys.
The White House and a powerful network of Congressional activists are behind the initiative, which parallels the Japanese Govt requirement to put all their federal and postal worker pension funds into JG Bonds. Also, the highly influential Ford and Rockefeller Foundations are pushing the reckless initiative that betrays the working class. They are engineering a new regulatory and tax incentive to pave the way for passage. Their goal and vile purpose is to herd and ultimately force Americans to convert their 401k’s and IRAs into government directed retirement accounts, obviously US T-Bonds. The de-privatization plan, also called individual retirement fund nationalization, is the brainchild of Teresa Ghilarducci from the Schwartz Center for Economic Policy Analysis (SCEPA), which is funded by the Rockefeller Foundation. Heavy handed tactics are being used that copy those used to ram nationalized health care down the country’s throat, despite loud significant public objection. Business Week has noted that new federal regulations designed to promote the conversion of individual pension funds into annuities are essential to direct cash into government controlled entities such as American International Group (AIG), whose cost to date has totaled $182.3 billion. The public could not invest in a worse cause, nor sink money into a more acidic cesspool. Students of history note that such nationalization of the people’s savings took place in Argentina two decades ago, once a powerful wealthy nation in the last century.
One way around this is to convert your IRA into a ROTH, or cash out and re-buy the gold and silver in your personal account. Yes, there is a steep tax bite, but if you are worried that your metals could be forcibly moved into dollar denominated bonds, it is something for you to consider.
We are currently signing the documents that will allow us to offer you a program that will allow you to purchase precious metals in Switzerland and store them safely in your name. As soon as we have the forms that you have to fill out to consummate a transaction, I will explain the plan in detail and tell you how you can get involved.