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Thread: Are 401K's safe?

  1. #31
    Quote Originally Posted by Madison320 View Post
    That's what I was guessing. It's good to hear someone else say it.




    Isn't it really the dollar not the the stock market that's the bubble now? My feeling is that stocks will go up as the dollar loses value. Just not as fast as other prices so you will lose purchasing power. But if you're holding cash or bonds or treasuries, you'll get crushed. Personally I'm invested in foreign stocks and physical gold.
    The value of bonds (including Treasuries) moves inversely with interest rates so if interest rates rise (and if inflation increases, so will interest rates since expected inflation is one component of interest rates) then yes, the value of bonds will go down.



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  3. #32
    Quote Originally Posted by Madison320 View Post
    That's what I was guessing. It's good to hear someone else say it.




    Isn't it really the dollar not the the stock market that's the bubble now? My feeling is that stocks will go up as the dollar loses value. Just not as fast as other prices so you will lose purchasing power. But if you're holding cash or bonds or treasuries, you'll get crushed. Personally I'm invested in foreign stocks and physical gold.
    The Fed itself reports that virtually the entire increase of the S & P since the crash has been fueled by QE. That strikes me as being a bubble in stick prices.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton



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  5. #33
    Quote Originally Posted by Zippyjuan View Post
    Trade volume isn't that low. It is down slightly this year but not much below where it has been for the last ten years- see bar graph below chart at this link: http://finance.yahoo.com/echarts?s=%5Edji+interactive#symbol=^dji;range=my; compare=;indicator=volume;charttype=area;crosshair =on;ohlcvalues=0;logscale=off;source=undefined; (image is flash so I can't copy it for you).
    I was thinking more about volume in the last week or two. I would check it out and see if I am right but I have to catch a plane.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  6. #34
    Have a good trip!

    Maybe August is a slow month- most people take vacations then. I don't keep track of things like volume so I am only going by the charts.

    Found a better chart (shows one year- you can select longer terms at the link) :


    http://www.marketwatch.com/investing/index/djia/charts
    Last edited by Zippyjuan; 08-14-2012 at 03:13 PM.

  7. #35
    Liberty is lost through complacency and a subservient mindset. When we accept or even welcome automobile checkpoints, random searches, mandatory identification cards, and paramilitary police in our streets, we have lost a vital part of our American heritage. America was born of protest, revolution, and mistrust of government. Subservient societies neither maintain nor deserve freedom for long.
    Ron Paul 2004

    Registered Ron Paul supporter # 2202
    It's all about Freedom

  8. #36
    401k's would never be seized. Just like HMO's were not nationalised by Obamacare. The rules will simply be changed a little bit so that you *want* to give up your 401k.

    Most likely wither by providing a way to be made whole right after a crash by shifting everything into Treasuries, or Social security, or placing a penalty for not doing so.
    In New Zealand:
    The Coastguard is a Charity
    Air Traffic Control is a private company run on user fees
    The DMV is a private non-profit
    Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
    The agriculture industry has zero subsidies
    5% of the national vote, gets you 5 seats in Parliament
    A tax return has 4 fields
    Business licenses aren't even a thing nor are capital gains taxes
    Constitutional right to refuse any type of medical care

  9. #37
    Quote Originally Posted by Zippyjuan View Post
    If the dollar is no longer used and your stocks are priced in dollars they will be worth nothing. But I don't see that happening.
    Wouldn't the price be closer to infinity than zero? Regardless, aren't shares expressed as some fractional worth of a corporation? Only the exchange is tied to the dollar, so couldn't these be traded with a different currency at the same or a different exchange?

    Maybe this is a nitpick, but how does being priced in dollars matter to a multi-national?

  10. #38
    Of course if they were worth "infinity" then one share could theoretically be exchanged for every single thing on the planet- including all other "infinity" shares.

    The shares are issued on one of the global stock exchanges and are traded on that exchange only- you can't take shares you bought on the German exchange and resell them on the UK stock exchange. So what do big international companies do? They issue shares on multiple exchanges. They may for example sell shares worth an initial value of $100 billion in New York and another $100 billion in Tokyo or Hong Kong. The share price is based on the total number of shares in the country issued. And they have different subsidiaries in different countries. The currency may not matter as much to the companies but it does matter to the exchanges- they don't want shares sold on another exchange dumped on their exchange- driving down prices (the value of shares) there. (winging this off the top of my head at the moment). Revenues are broken down by country too (which will effect the stock price by stock exchange country as well- good sales in the UK may cause their shares there to rise while poor results in the US may cause the stock to fall there)- for tax purposes. They have to pay their corporate taxes for each country so they basically have different businesses in different countries each with their own stock shares issued- even if they share the same name and the bulk of the profits goes to the main headquarters.

  11. #39
    Anything that is on paper isn't safe. The only safe money you can have must be something that isn't paper and in your own possession.

  12. #40
    Quote Originally Posted by Dr.3D View Post
    Anything that is on paper isn't safe. The only safe money you can have must be something that isn't paper and in your own possession.
    winner.
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12



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  14. #41
    Quote Originally Posted by Shredmonster View Post

    Check out ZeroHedge.com some time for starters.
    Everyone at my firm reads that daily. Needless to say, most did well during 2008.

  15. #42
    Quote Originally Posted by Zippyjuan View Post
    Of course if they were worth "infinity" then one share could theoretically be exchanged for every single thing on the planet- including all other "infinity" shares.
    I meant if the share is priced in dollars, and dollars are worthless or nearly so (say, $1 bill = 0.0001 oz of silver 'cause you can still wipe your ass with it or something), then buying anything with dollars might require a HUGE number of them.

    But regarding your prior quote,

    Quote Originally Posted by Zippyjuan View Post
    If the dollar is no longer used and your stocks are priced in dollars they will be worth nothing. But I don't see that happening.
    Regardless of the exchange, if the share is defined as fractional ownership (say one millioneth) of a company, why does it matter if the dollar is still used? Ought you not still own a millioneth of that company?

    If you are correct, then we would want to diversify which exchanges we trade on, no??? My contention has more to do with "worth nothing" than the price of the share in dollars (which may be undefined or no longer applicable).

  16. #43
    Quote Originally Posted by Madison320 View Post
    What do you think the chances are that 401Ks (or any retirement account) gets raided when the dollar starts to crash? I think it's a numbers game. A lot of voters with retirement accounts would get seriously pissed off. On the other hand an even greater number of voters will have their government handouts reduced if we don't raid retirement accounts.
    I'm just curious, why would the government raid 401ks if the dollar collapses? That doesn't even make sense. 99.9999% of money in 401ks is in dollar denominated assets. What would it accomplish?

    I don't think it is completely out of the question that government will dictate at some point down the road how people allocate money in their accounts. I wouldn't be stunned if government forces people to put money in some type of fixed type of investment.

    All paper currencies have failed at some point in time throughout history. That said, the long run can be a very long time. Think about how many people have said the dollar is through throughout history. A lot economists thought we would have hyperinflation in the late 70's. Think how many people have called for hyperinflation in Japan. They are on like QE77 right now. They run deficits almost 50% greater than Greece. They have printed at an alarming rate since 1990. And yet their currency has held up (though they have had almost no growth and the stock market is down 75% since 1989.)

  17. #44
    Quote Originally Posted by jonhowe View Post
    Everyone at my firm reads that daily. Needless to say, most did well during 2008.
    That's interesting because Zero Hedge didn't exist in 2008. And for some reason, even if it did, I don't think they would have told people to plow money into Treasuries and then short oil during the summer.

  18. #45
    I never did think it was safe.

    I remember way back when finding out that they fined you for using your own money early. I figured that was punishment for you using their money that they had already been spent and now had to be coughed again up just for you.


    I see someone has already posted the grab play they are working on. Remember just because you can stop them once, on an idea like this, they have the ability to keep rising up, like those guys in the scary movies. They can keep rising up because they have the ability to fire up the fake money presses to print what ever it takes to get their way. Then they stiff us with the bill.

  19. #46
    Quote Originally Posted by Acala View Post
    People who held solid German stocks through the Weimar hyperinflation came out all right. When you buy a share of equity in the company it remains a share regardless of what you purchased it with. One share of company A is one share of Company A no matter what happens to the currency. In fact, corporate equity is often not even purchased in dollars, being instead offered as part of a compensation package or as part of a purchase price of a business. But I would want to hold the certificates if I were to stay in equities.

    That having been said, if I had money in equities I would be on the phone right now trying to liquidate them. Penalty be damned. The stock market is a bubble.

    The value of the dollar has had a reprieve due to the collapse of the Euro. But the honeymoon will end. I would turn stocks into dollars and start hunting for agricultural land to buy with the dollars while they retain value.

    The way I see it is that when the number of dollars is doubled it then takes twice as many to buy something. You do all right in regards to inflation as your getting twice as many of something worth half as much...

    until they stiff you with a capital gains tax and cut themselves in on your stuff.

    I mean really! They stiff you with a capital gains tax when there wasn't any real gain.

    Are these the false profits we were warned about?




  20. #47
    Quote Originally Posted by misean View Post
    That's interesting because Zero Hedge didn't exist in 2008. And for some reason, even if it did, I don't think they would have told people to plow money into Treasuries and then short oil during the summer.
    I have no idea what they read in 2008, I started 14 months ago. I do know that many of the advisors I work with had losses significantly below the S&P, AND that they do read ZeroHedge every day. They also turn up CNBC when Ron Paul is on, especially when he's grilling Bernanke. (Also, since we don't do any proprietary trading, the company itself didn't lose as much as many did.)

  21. #48
    The biggest problem w/ 401K is you can't get to your money if you need or want to - even with the penalty. Back in '07 I saw the crash coming and wanted to take out 1/2 of our money. Well, the only way we could get it was to leave the job, major medical, or be in foreclosure. None of them applied so the best I could do was move around some of the money. Very frustrating when you aren't allowed to take out your own money. We still put a bit in but just enough to get the employer match.



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  23. #49
    Quote Originally Posted by Lmata View Post
    The biggest problem w/ 401K is you can't get to your money if you need or want to - even with the penalty. Back in '07 I saw the crash coming and wanted to take out 1/2 of our money. Well, the only way we could get it was to leave the job, major medical, or be in foreclosure. None of them applied so the best I could do was move around some of the money. Very frustrating when you aren't allowed to take out your own money. We still put a bit in but just enough to get the employer match.
    If you saw the crash coming why didn't you move money into fixed or money market. What would you do differently with it outside of a 401k? Nobody was forcing you hold risk assets inside of it.

  24. #50
    Thanks for all the good info, all who have provide. Got a buddy that asked me this exact question. He is pulling out like he always does
    "Life, Liberty and the pursuit of Happiness"

  25. #51
    A lot of people have put at least 10% of their holdings in physical precious metals. If there were a serious economic situation, they would still have that to hold onto.

  26. #52
    Quote Originally Posted by angelatc View Post
    I don't think it's a done deal literally, but I think that the fact they invited the author of the plan to testify indicates that they at least consider the plan viable. For all we know, they already have the plan drafted up and are waiting for a crisis to shove it through. Sort of like the Iraq war plans.
    Yeah, that is what scares me.

  27. #53
    Quote Originally Posted by Tod View Post
    When you say "closed out", you mean you paid the 10% penalty in addition to the taxes?
    Not exactly , she is retirement age. , it is closed out , she will be retiring from her current job in Feb , working part time at a new job and expanding her home business , I have no idea what to do with mine yet, still have 3 % of my gross going into it , did switch 40 % to bonds before the last crash , so , I am actually up a bit since then, now, finally , last quarter , but I feel the next crash is coming , so I need to figure something out , it actually represents, not a large portion of our total which is mostly in property ,etc , but I want to salvage it ....
    Last edited by oyarde; 08-14-2012 at 11:29 PM.

  28. #54
    [QUOTE=Zippyjuan;4581674]That could be expensive. Say you had $10,000 in one. Ten percent penalty knocks you down to $9000 and then it counts as ordinary income for you. If you are in a 25% tax bracket, you could lose another $2500 (not sure if the tax applies to amounts before or after the penalty is applied) or $2,025 which would drop your $1000 down to about $6500. They keep 20% as withholdings against the taxes. You just lost $3500. Now if you wanted to put that into a different investment, it would have to go up by 46% just to break even (ignoring costs of the new investment) with what you had in the 401k (to get the $6500 back up to $10,000). That is a big return you need. And that assumes that the 401k didn't grow at all in that time- otherwise you need even more growth to simply break even with keeping the account. You forgot state tax..

  29. #55
    Quote Originally Posted by Lmata View Post
    The biggest problem w/ 401K is you can't get to your money if you need or want to - even with the penalty. Back in '07 I saw the crash coming and wanted to take out 1/2 of our money. Well, the only way we could get it was to leave the job, major medical, or be in foreclosure. None of them applied so the best I could do was move around some of the money. Very frustrating when you aren't allowed to take out your own money. We still put a bit in but just enough to get the employer match.
    Well , in the case of knowing a crash is coming , you can take a loan out of it for near half value and buy land and precious metals , I have done it before, and may again....

  30. #56
    Quote Originally Posted by Dr.3D View Post
    Anything that is on paper isn't safe. The only safe money you can have must be something that isn't paper and in your own possession.
    Yep



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  32. #57
    Quote Originally Posted by heavenlyboy34 View Post
    winner.
    Yep

  33. #58
    Quote Originally Posted by oyarde View Post
    Not exactly , she is retirement age. , it is closed out , she will be retiring from her current job in Feb , working part time at a new job and expanding her home business , I have no idea what to do with mine yet, still have 3 % of my gross going into it , did switch 40 % to bonds before the last crash , so , I am actually up a bit since then, now, finally , last quarter , but I feel the next crash is coming , so I need to figure something out , it actually represents, not a large portion of our total which is mostly in property ,etc , but I want to salvage it ....
    You are usually up on things and know that bonds will head south if inflation or interest rates head up. Can't say into what but would suggest to anybody with money in bonds or Treasuries or the like to start cutting them back and changing them over to something else. Mine is mostly either going to the mortgage or into a dividend paying utility.

  34. #59
    Quote Originally Posted by Zippyjuan View Post
    You are usually up on things and know that bonds will head south if inflation or interest rates head up. Can't say into what but would suggest to anybody with money in bonds or Treasuries or the like to start cutting them back and changing them over to something else. Mine is mostly either going to the mortgage or into a dividend paying utility.
    Yeah, I just did that to cut the losses I saw coming then , now I need to do something else ( in my 401 ) I only put the minimum in they match , so I never wanted to shut that off , but I really do need to do something , Canadian mint has a quarter ounce .9999 silver polar bear with $20 face value , might just get a wild hair and borrow 40 % and buy those

  35. #60
    Quote Originally Posted by misean View Post
    I'm just curious, why would the government raid 401ks if the dollar collapses? That doesn't even make sense. 99.9999% of money in 401ks is in dollar denominated assets. What would it accomplish?

    I don't think it is completely out of the question that government will dictate at some point down the road how people allocate money in their accounts. I wouldn't be stunned if government forces people to put money in some type of fixed type of investment.

    All paper currencies have failed at some point in time throughout history. That said, the long run can be a very long time. Think about how many people have said the dollar is through throughout history. A lot economists thought we would have hyperinflation in the late 70's. Think how many people have called for hyperinflation in Japan. They are on like QE77 right now. They run deficits almost 50% greater than Greece. They have printed at an alarming rate since 1990. And yet their currency has held up (though they have had almost no growth and the stock market is down 75% since 1989.)
    But Japan only increased its monetary base by about 5% a year. Japan has a huge trade surplus. Japanese citizens have savings. The US increased its monetary base by around 300% in just 3 years. We have a huge trade deficit. US citizens are broke. And that was while we can still borrow money. Wait until we HAVE to print. To stop inflation in the 1970's Paul Volcker set the interest rate at 20%. We can't do that now because of the debt. Not even close.

    According to this article the average lifespan of a fiat currency is 34 years:

    "According to an interesting study of the 775 fiat currencies that have existed, 599 are no longer in circulation. The median life expectancy for the defunct currencies? Fifteen years. Perhaps the author was being unfair by focusing solely on the failures. Sadly no, the average life expectancy of all fiat currency is running at a truly underwhelming 34 years. Only a select few have managed anything approaching old age. The British pound sterling is one such example at over 300 years and counting. Before we get too excited by this apparent example of longevity, at inception the pound was defined as 12 ounces of silver. The pound is now worth less than 0.5% of this original value and of course there is no silver involved anywhere. In other words, the most successful currency in existence in terms of life-span has lost more than 99% of its value."

    http://www.europac.net/voices/experience_teacher_fools

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