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Hi All, sorry to have dropped off the map (a few issues with the US economy imploding and all). I have a 200K$ Vangaurd retirement account. There is some mechanism to buy property (i believe income/rental) within a retirement type account (not Vangaurd).
Before I throw my accountant into a mild cardio infarction, I was wondering if anyone has used this provision to buy CR property. Ofcourse I’m trying to avoid the criminal taxes of pulling my money out and score my dream house in Potrero.
If this 700B$ boondoggle gets thru, it may provide temporary life-support to our economic corpse, enough time to maybe sell my house. I’m also getting a little nervous about getting money out of the country (not that I have much yet!), but in a crisis that’s one of the first things they stop-keeping dollars from fleeing. Any thoughts would be great, thanksI think most people fail to see the big picture here, although $700 billion is a monumental sum of money, it’s actually the tip of the iceberg…
The Paulson Plan will start with $700 billion, and probably end up being $7 trillion (plus) as they extend the bailout to include not only real estate derivatives but credit default swaps and interest rate swaps as well.
Someone should inform Congress that there are approximately $1.4 quadrillion (notional) of derivatives floating around the globe. If 1% is bad, that’s $14 trillion. If we’re lucky only 1/10 of one percent is bad, which would be $1.4 trillion. The derivative numbers (BIS) are as of the end of Q2 2008.
Scott Oliver – Founder
WeLoveCostaRica.comScott,
700 billion the “tip of the iceberg”? I am hearing it could go as high a 1 trillion but nobody anywhwere, even the most bearish of bears, is talking about the numbers you allude to. Have you any internet site articles by credible soures that back those numbers up?Nobody says the “bail out” will work for sure. I am reading that we could very well still have a great depression. What disturbs me the most is that the greatest authorities on this matter DO NOT KNOW what will happen next. I am hearing no encouraging words from any of the people to whom I would normally pay attention.
Edited on Sep 28, 2008 10:57
Edited on Sep 28, 2008 10:57
Edited on Sep 28, 2008 10:58
Scott, you are so right-it’s a bandaide on a sucking chest wound, the only bounce I hope for would be a very temporary psychological one. I am fairly certain no one has mentioned the credit default swap numbers out of shear terror. which is why I’m very worried about US treasuries (the safest haven on earth-ha) blowing up next.
Sprite I’ll look up some links, but you can start by looking up Nouriel Roubini’s site-they call him Dr.Doom, but he’s a brilliant economist. “the smirking chimp” is another site that has tons of articles and links to everything from huffington post to bloombergs. the only real money (and I say that loosely and fiatly) is what’s left in American’s savings accounts and retirement accounts and I am fairly confident the Fed and Treasury is about to be able to grab access to that.I guess that makes me Mrs. Dr. Doom.In January 2008 [ http://www.ustreas.gov/press/releases/hp767.htm ] Henry Paulson stated before the U.S. Chamber of Commerce that:
“The U.S. economy is resilient. The unemployment rate remains low and job creation continues, albeit at a modest pace. The structure of our economy is sound and our long-term economic fundamentals are healthy.” And:
“The U.S. economy is resilient and diverse. It has been remarkably robust in recent years, and will be so again.”
On March 31, 2008, [ http://www.ustreas.gov/press/releases/hp897.htm ] Secretary Henry M. Paulson, Jr. spoke on about Blueprint for Regulatory Reform saying:
“I have the greatest confidence in the resiliency, flexibility and strength of our economy and our capital markets. We are focused on maintaining stable, orderly and liquid financial markets and ensuring that our banks continue to support the economy by making credit available to consumers and businesses.”
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So here’s Henry Paulson, an ‘expert’ who clearly did NOT see what was about to happen – even I saw this coming and so have the VIP Members who have read my articles – and Paulson wants you to hand over $700 billion of your hard earned income.
Of course, Henry Paulson is worth about US$700,000,000 so this meltdown will not affect him too much…
And please note the following sentence included in the bailout package proposed by the Bush administration:
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“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” [ http://www.huffingtonpost.com/2008/09/22/dirty-secret-of-the-bailo_n_128294.html ]
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What this means is that the $700 billion in your taxpayer dollars will purchase the distressed assets of several failed financial institutions, and all of this will be done in such a way so that it’s unchallengeable by courts and ungovernable by the People’s duly sworn representatives.
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From [ http://www.nakedcapitalism.com/2008/09/marc-faber-us-needs-as-much-as-5.html ]
“Swiss investor Marc Faber, known for a long track record of good calls (he was a commodities bull until late this spring, for instance, when he reversed his view) and a fine grasp of financial markets history, confirms the estimate earlier in the week by Ken Ohmae that the US needs a salvage operation much bigger than the one envisaged by the Treasury plan, and the damage may come to $5 trillion
Marc Faber, managing director of Marc Faber Ltd. in Hong Kong, said the U.S. government’s rescue package for the financial system may require as much as $5 trillion, seven times the amount Treasury Secretary Henry Paulson has requested….
“The $700 billion is really nothing,’ Faber said in a television interview. “The treasury is just giving out this figure when the end figure may be $5 trillion.’…
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From [ http://www.bloomberg.com/apps/news?pid=20601087&sid=a.0jQ66fMGPQ&refer=home ]
The cost of the government rescue package to taxpayers “will run into the trillions,’ Gross added. “I’m forecasting three years from now we’ll see our first trillion-dollar budget.’ (Bill Gross manages the world’s biggest bond fund).
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And yes! Nouriel Roubini is brilliant…
“Thus the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification. This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the US taxpayer – the common and preferred shareholders and even unsecured creditors of the banks.” [ http://www.rgemonitor.com/blog/roubini/ ]
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I am making an educated guess here, but based on the information I am reading – I do NOT watch TV – this bailout package will end up costing the US taxpayer at least ten times more than we are being told.
Lastly, after everything that we have gone through over the last decade, why oh! Why would anyone believe what these people are saying anyway?
Scott Oliver – Founder
WeLoveCostaRica.comEconomic Armegeddon is vague. Does it mean we will end up with a barter economy with massive riots over basic survival material such as food and energy? Or does it mean we will slip into a severe depression lasting decades …where all government entitlements such as education and social security will be severly limited or gone?
Edited on Sep 28, 2008 15:02
Nouriel Roubini has no hidden agenda, he is telling the economic story as he sees it…
Henry Paulson is a public servant (Yeah! Right…) trying to suck US$700 billion out of your collective pockets …
Who do you think is more likely telling the truth?
Scott Oliver – Founder
WeLoveCostaRica.comIt just may be the whole truth. Jim Cramer, an MSNBC TV personality who does a show on investing in stock equities and is usually one of the more hopeful commentators, made an amusing but chilling comment this morning.
“If this bail out doesn’t work, a lot of people will have to get used to living in their pajamas.”If this bailout gets approval… and it turns into trillions of dollars… which it probably close to the figure needed, then what better a time to “create” the North American Union with Canada and Mexico and “introduce” the Amero. with a huge devaluation of the US$, the Amero would be the saviour. Floated on the world market, with everyone that has US$ converting to the Amero, it would create significant income for the Fed and Treasury. Could be just the recipe needed…
What you are referring to ‘enduro’ is a financial scam of monumental proportions…
How much confidence do you think the capital markets of the world would have in that new system created after the first one went bankrupt?
Scott Oliver – Founder
WeLoveCostaRica.comIf you had bought a car from a dealer which proved to be a complete wreck and where you had to write off your entire ‘investment’ except for the tires… When it came time to buy another car, would you return to that same dealer thinking that everything was OK now?
And pray tell! HOW exactly would it be a “new and improved” currency? HOW exactly would it be “stronger”? What would it be backed by?
Scott Oliver – Founder
WeLoveCostaRica.comUsing your numbers, the US is already bankrupt, they (the people) just don’t know it yet.
I am no economist or accountant, but wasn’t the Euro introduced to stabalize the weaker economies and when it happened the stronger economies took a short term hit then rebounded to be stronger. The weak economies got a big jump then retracted slightly but stabalized in a better condition.
The US economy is in a mess, Canada is holding it’s own, and Mexico is growing due to it’s oil and companies moving production facilities there. Using the Euro analogy, introducing the Amero would slow Mexico briefly but continue to grow and become stronger. Canada would take a short term hit, but rebound and the US would see a big jump and then stabalize in better condition.
I know this is a somewhat primative approach to it, but it made sense in Europe so why not in North America.
The US has been busy lately building trade pacts with many countries especially around their immediate location… this can only help in this situation.
I’m sure the Bilderburgs or Morgans can answer your questions better.. as they control the money.
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