Free Markets, Free People

Cyprus


Observations: The QandO Podcast for 24 Mar 13

This week, Bruce, Michael and Dale discuss the events of the week.

The direct link to the podcast can be found here.

Observations

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Are we looking at a Cyprus moment here?

I have to preface this by saying absolutely nothing would surprise me any more.  Since this administration has come into office, what would have, or should have been, unthinkable previously has not only happened but has been cheered by a certain element of our population.  ObamaCare is the most visible evidence of this.  But there is plenty of other stuff too.  Drone strikes on US citizens are “okay”, i.e. “legal”.  Speaking of “legal” how about this:

The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters.

The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial databanks, criminal records and military intelligence. The plan, which legal experts say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates.

More shredding of Constitutional guarantees.  And what do we hear for the most part?  A collective yawn.

We’ve all seen what has happened on Cyprus with the government imposing a “levy” on savers.  A “levy”.  Outright theft is what it is.  And even while they’ve lowered the amount of the “levy” they’re still imposing it.

Couldn’t happen here, could it?  Don’t bet on it.  What other government is desperate for revenue?  And where is it that 19 trillion dollars exist that is currently out of their reach?

Try 401(k)’s. Katie Pavlich has the story:

As a reminder, the United States government has been eying and researching how Americans use their 401k plans for quite some time now. Recently we saw the U.S. Consumer Financial Protection Bureau suggest the government help “manage” retirement plans.

The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments.

“That’s one of the things we’ve been exploring and are interested in in terms of whether and what authority we have,” bureau director Richard Cordray said in an interview. He didn’t provide additional details.

The bureau’s core concern is that many Americans, notably those from the retiring Baby Boom generation, may fall prey to financial scams, according to three people briefed on the CFPB’s deliberations who asked not to be named because the matter is still under discussion.

The retirement savings business in the U.S. is dominated by a group of companies that handle record-keeping and management of investments in tax-advantaged vehicles like 401(k) plans and individual retirement accounts. The group includes Fidelity Investments, JPMorgan Chase & Co. (JPM), Charles Schwab Corp. (SCHW) and T. Rowe Price Group Inc. (TROW) Americans held $19.4 trillion in retirement assets as of Sept. 30, 2012, according to the Investment Company Institute, an industry association; about $3.5 trillion of that was in 401(k) plans.

So we have a new government agency (created in 2011) looking for a job to justify its continued existence and an administration and political elite looking for revenue while over 19 trillion dollars lays in front of them.  The statement “the …. bureau is weighing whether it should take on the role of helping Americans manage [their] retirement savings” should send shivers down your spine.  Why do they feel the need to consider such a thing?

Well, it’s because you need their protection:

This agency, created by the 2010 Dodd-Frank-Act, is very concerned about how safe your retirement savings are. They are apparently concerned that retiring baby boomers may become victims of financial scams.

That’s right, it’s save the geezers instead of the children.  You’re simply too dumb to manage the account you’ve spent your entire working life amassing.  You have to have government help to do it and that means what?  Government access and, one would assume, at some point government permission to spend your dollars.  How else does government save you from “scams”  (you know, like Social Security)?

You sputter, “but they have no right…”.  Since when has government really been concerned with rights?  If it can give spy agencies access to your financial records “legally” to combat terrorism, how big of a stretch is it to believe they’ll grant another agency access to your financial records (401(k)) to combat “scams?”

And, with the camel of government’s nose under the tent, how long before that access turns into some sort of “levy” for this service they provide that you never asked for?

~McQ