muses of the moment

April 19, 2013

Forced Loans

Remember this post from groovygirl? Click here.

Point 1: Mortgage securities are still a problem….not solved, not fixed, not settled, and getting bigger.

Point 2: The entities (notice the non-bank banks on the link) that are still standing and have still have off the book exposure to these unsettled securities met with Obama on Thursday. Click here.

Point 3: Martin Armstrong has had several blog posts this week about pension funds, IRAs, and 401ks confiscation and/or forced loans. Click here for one of them. In another post, he suggested a possible date for these forced loans to begin as 2016. A result of the unsettling economic turn in October 2015?

When point one crashes and triggers a collapse and credit freeze again, point two’s TBTF will get a “bail-in” from your money in point three. That bail-in will go thru the forced buy of government bonds.

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3 Comments »

  1. Hi GG,
    Cyprus could not print so they they were forced to do a bail-in by the bigger EU members. Why would governments like USA, UK, Canada do a confiscation/bail-in rather than print? bail-in will cause a lot of social unrest.

    Thanks,
    RM

    Comment by RM — April 22, 2013 @ 6:03 pm

  2. RM,

    They can print first, but at some point there will be loss of confidence in the holders of US debt, including the Fed (quickly become largest holder of US debt and other US related securities, like mortgaged back securities). In order to keep the ponzi scheme going they will either have to find new buyers of US debt, forced buying by pension, 401ks, and IRAs, or confiscate that money outright and buy bonds themselves. It is loss in confidence of the debt that will be the reason for the forced loans. This is a global debt collapse happening first countries not able to manipulate their currency, then it moves into all debt large or small in some fashion.

    If they time a confiscation right, i.e. a crash, people who do not understand what is happening, may give what little money they have left to a government nanny in order to “ensure” they have little pennies for the rest of their life. Not that gg has any confidence that those new promises will be kept anymore than the past ones. Young people who don’t get the opportunity for a pension or are paying off too many student loans to have a 401k will not be affected by this move.

    They don’t have any skin in the game, except they may have their parents move in with them….oh, they moved in with their parents, they are already there. This is falling along a generational divide. Should be a very interesting dynamic.

    gg

    Comment by totallygroovygirlfriday — April 22, 2013 @ 6:26 pm

  3. Excellent explanation GG. Thanks.

    Comment by RM — April 22, 2013 @ 6:38 pm


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