The Fed Steals from Retirees and Savers

by Nick Giambruno, Senior Editor | May 27, 2015
FACEBOOK
TWITTER
GOOGLE +
SUBSCRIBE
One of the biggest robberies in the history of mankind is happening right now.

Strangely, few seem to notice.

Maybe that’s because the perpetrators are wearing suits and ties instead of ski masks. They use complex economic jargon instead of guns. And the media treat them with respect.

None of this changes the nature of their actions. They’re still taking without consent. The result is no different than if a thief picked your pocket.

Here, though, most victims don’t even realize they’re victims. The most prominent victims are retirees.

Retirees depend on the investment income earned from their life savings to pay the bills. The amount of income generated depends on interest rates.

You see, market forces don’t set interest rates. A politburo of central planners—who call themselves central bankers—set them. The Federal Reserve is the US’s central bank.

Central banks make the absurd claim that they operate independent of politics. In reality, they’ve always existed to please politicians. Their actions usually come at the expense of prudent savers.

For years the Fed has set interest rates lower than they would have been absent its intervention. It does this in the mistaken belief that it will benefit the economy by boosting spending. But encouraging spending just for the sake of spending isn’t sound economics.

Debtors also benefit because lower interest rates mean lower interest payments. And there is no bigger debtor on the planet than the US government.

Artificially low interest rates pump massive distortions into the economy. The results are disastrous for retirees.

Back in the year 2000, a five-year certificate of deposit would pay out about 6%. If you had $1 million, you could generate $60,000 per year with little risk.

Fast forward to today. The average CD now pays a meager 1.5%.

You now need $4,000,000 in retirement savings to generate that same $60,000 in annual interest income.

Saving money is four times harder than it was just 15 years ago, and the Fed is the culprit.

The Fed is siphoning money from savers by setting interest rates lower than what the free market would. It’s an enormous—but hidden—wealth transfer from savers to debtors. It amounts to one of the biggest swindles in world history.

But you don’t have to be a passive victim. If you take a global view, you can escape the Fed’s shakedown. Foreign investments can have higher yields and better risk/reward profiles.

Though chances are good that one of the big custodians—like Fidelity or Schwab—holds your retirement savings.

This is a problem because they put strict limits on what you can invest in. It’s like an investment straitjacket. Foreign investments likely aren’t on the menu.

There is no reason at all that it has to be this way, though.

An individual retirement account (IRA) can be set up to invest in pretty much anything in the world. It can open an offshore bank account and invest in higher-yielding CDs. It can own foreign stocks, foreign bonds, and foreign mutual funds. It can own physical gold stored abroad. It can invest in private companies. It can own foreign real estate and reap attractive rental yields.

There are almost limitless possibilities. The world is your investment oyster.

Structuring your IRA this way breaks the investment straitjacket imposed by the large custodians. It’s key to giving you more options with your retirement savings. It gives you a means to resist the Fed’s war on savers.

These 19 passports will be a lot more valuable on July 1st!

It seems strange that a complete accident of birth has such a massive impact on someone’s life.

We don’t get to control where we’re born. It’s a fluke really. Yet as soon as we come into this world a particular nationality is thrust upon us like a birthmark that stays with us for life.

Our nationality dictates so many things throughout our life.

It might mean that we’re required to serve in the military– to go fight and die in some foreign land at the behest of an insensitive, out of touch politician.

It might mean that we’re required to pay an ever increasing portion of our income to finance government largess that we don’t agree with at all.

It can also substantially restrict the places we can go and travel in this world.

That last one is a major issue, because travel is a huge opportunity.

The world is a massive place. It’s gorgeous and there’s so much to explore. Anyone who ever says it’s a small world clearly never spent 26 hours on a plane trying to get to Palau.

There are so many opportunities and so many amazing people to meet that it’s only possible to capture the full human experience through travel.

Yet if you happen to be born on a particular piece of dirt, your travel opportunities are limited.

United States citizens, for example, have a lot of latitude in terms of where they can go. Though there are still a lot of restrictions.

Americans need a visa to go to a number of countries, including Russia, China, and several countries in South America.

If you’re from Ukraine, on the other hand, you can travel to Russia without a visa. However the vast majority of the world is off-limits unless you first jump through a number of administrative hoops.

Representatives from the European Union recently closed out a summit in Riga to decide the future of EU visa policy with respect to Ukraine.

Once again, Ukraine was denied visa-free access to the EU, proving that “European support” for Ukraine against Russia is just hot air and empty promises.

There are, however, 19 other countries, which will be joining the EU visa-free list as of July 1, 2015. They were officially approved late last year and reaffirmed at the summit.

They are: Colombia, Peru, Dominica, St. Lucia, Grenada, St. Vincent & the Grenadines, Trinidad & Tobago, UAE, Marshall Islands, Kiribati, Nauru, Palau, Micronesia, Samoa, Solomon Islands, East Timor, Tonga, Tuvalu, and Vanuatu.

The thing that’s interesting about nationalities is that even though we’re born with one, you don’t have to live your entire life with that single option.

It is possible to obtain citizenship and a passport from another country. This means more options to travel and more options to live and work somewhere else should you want.

Panama is a great example.

There’s still an easy and inexpensive process to obtain residency in Panama, and in 5-years time you’ll be able to apply for naturalization, and then a passport.

Of the 19 countries that join the EU visa-free list this July, both Grenada and Dominica have “economic citizenship” programs where you can make a low six-figure investment in the country in exchange for citizenship.

Colombia and Peru are two places where you can become a legal resident and apply for citizenship in 2-5 years.

This can be very cost-effective, as in Colombia it can cost less than $1,000 to obtain residency, including legal assistance.

Bottom line– there are always options. You don’t have to go your entire life being restricted by something that was an accident of birth.

Having a second passport means having more freedom and more possibilities.

Blacksmith Global Ltd.
Publisher of Sovereign Man
30 Cecil Street #19-08
Singapore, Singapore – No State 049712
Singaporeate 049712pore – No State 049712ngapore, finding expedited or cost effective ways to obtaining one is a great tool and insurance policy for anyone to consider.