Wednesday, January 12, 2011

Pensions Seized In Europe


.... and don't think that can't happen here.

With a major pension crisis on the horizon and a government that is hungry for revenue, it's just a matter of time before we see something similar to what is happening in Europe.
People’s retirement savings are a convenient source of revenue for governments that don’t want to reduce spending or make privatizations. As most pension schemes in Europe are organised by the state, European ministers of finance have a facilitated access to the savings accumulated there, and it is only logical that they try to get a hold of this money for their own ends. In recent weeks I have noted five such attempts: Three situations concern private personal savings; two others refer to national funds.

The most striking example is Hungary, where last month the government made the citizens an offer they could not refuse. They could either remit their individual retirement savings to the state, or lose the right to the basic state pension (but still have an obligation to pay contributions for it). In this extortionate way, the government wants to gain control over $14bn of individual retirement savings.
The article continues on describing other pension grabs in Bulgaria, Poland, France and Ireland. Americans should be on notice, because the same scenarios can play out here at home. As the article states: "If fiscal austerity becomes a real issue in the U.S. the way that it's been reaching critical mass in Europe -- don't think that U.S. lawmakers regard your either your personal wealth or money they might owe you as sacrosanct. Government has a habit of looking out for itself."

... and so what should WE do to stop government from raiding our 401K's and IRA's?
The government has already been manipulating the stock and bond markets. It could very easily make the markets crash taking the value of your savings with it. They could offer you a "sweet deal" to "help you cut your losses" confiscate your account in return for some IOU and then return the market to "normal" after grabbing your account... or some other similar scenario.

Don't think it can happen?
Maybe not today, maybe not tomorrow - but it could very well happen.

Remember, there's about $3 trillion in 401(k)s in the United States.
All that money is pretty tempting to the powers that be.

and don't forget that the government made a deal with Prudential to takeover veterans life insurance benefits.

They already have been stealing our wealth via the inflation they are creating with Zimbabwe Ben's magical printing presses.

Taking your savings from you is not that much more of a leap.