On Poland and Detroit. Not For the Faint of Heart.

Back to finance.  Poland did exactly what I and a few others have been warning about for years with regards to private retirement accounts and pensions.  Poland confiscated 50% of all private pension funds last week.  PRIVATE pensions.

As Warren Pollock and I have been screaming, one of the largest chunks of collateral left in the system is private retirement money, both in the form of 401(k)s and IRAs and in private pension accounts.  In the U.S., the latest data for 2012 shows that there are now $10.5 Trillion in private 401k and IRA holdings, with another $9 Trillion in pensions and annuities.

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The regime has been fairly open about its plans to “nationalize”, read CONFISCATE, this collateral and implement a system of “mandatory retirement savings accounts”, which will be just another confiscatory redistribution into the hands of the oligarchs and their cronies.  This what Poland just did.  This is what MF Global was in its essence.  This is what Cyprus was, except the Cypriot confiscation was done to demand deposit accounts instead of retirement accounts, which is now termed a “bail-in” – but it is all of the same stripe, namely the utter destruction of the notion of private property and the redistribution of all wealth into the hands of the oligarchs.   In Poland, the private pension paradigm has now also been destroyed because no one will want to put money into a private pension after this knowing that it can and will be stolen by the government at any time with zero redress. Continue reading

Why You Will Be Blindsided By The Next Financial Crisis

“The global financial crisis that began in the United States in the summer of 2007 was triggered by a bank run, just like those of 1837, 1857, 1873, 1893, 1907 and 1933.”  That’s the theme of Yale economist Gary Gorton’s Misunderstanding Financial Crises, Why We Don’t See Them Coming, published last year by Oxford University Press. Students of financial crises will tell you that Gorton’s theme is highly relevant to the next meltdown we could face someday soon. Continue reading