Does Obama seize 401 - k and IRAs to fund the government - like Spain has done , like Portugal has done ?
http://www.silverdoctors.com/like-spain-the-fed-treasury-will-pull-out-nuclear-option-raid-private-pension-funds/
By AGXIIK:
Moments ago on MSNBC, VP Biden announced that President Obama is considering going after the 2nd amendment via executive order.
Biden, who is scheduled to meet with execs from the NRA Thursday, stated thatPresident Obama is going to act, and that executive orders and executive action can be taken.
Submitted by Tyler Durden on 01/09/2013 13:24 -0500
Carney was asked repeatedly to clarify the White House's position on the platinum coin during his daily press briefing, but seemed to downplay — although not completely proscribe — the idea.
The White House is dismissing suggestions to sidestep Congress to meet the nation's debt obligations, declaring that it is Congress' responsibility to pay the bills of the United States.
President Barack Obama's adamant stand that he will not negotiate with Congress over raising the nation's borrowing limit and Republican demands that a debt ceiling vote be linked to spending cuts have prompted a creative outburst of alternatives to driving the country into default.
Under one proposed scenario, pushed by a number of House Democrats, the president could invoke the 14th Amendment, a post-Civil War change to the Constitution that states that "the validity of the public debt of the United States...shall not be questioned."
Another proposal would take advantage of a legal loophole meant for coin collectors and have the Treasury mint platinum coins that could be deposited at the Federal Reserve and used to pay the nation's bills.
"There is no plan B. There is no backup plan," White House spokesman Jay Carney said Wednesday. "There is no alternative to Congress raising the debt ceiling."
The government has already reached its $16.4 trillion borrowing limit and by late February or early March the Treasury Department will run out of ways to cover debts and could begin defaulting on government loans.
As of Wednesday 21 Democrats, led by Rep. Peter Welch of Vermont, had signed a letter urging Obama to invoke the 14th Amendment that they say gives him the authority to raise the debt ceiling without going through Congress. The Democrats said in a letter that they would support the use of any authority, including the constitutional provision, to prevent the nation from going into default, an event that some economists predict could trigger a global recession.
The Democrats, in their letter, said they fully supported Obama's position that raising the debt ceiling will not be subject to negotiation. "Threatening default on our nation's debt is an economic weapon of mass destruction that will have immediate and catastrophic consequences for the economy as well as America's standing in the world," they said.
Welch, in an interview, told The Associated Press said he understood that the president might not want to embrace the 14th Amendment alternative at this point, when it might appear to be a power grab. But "if there is the ultimate act of congressional irresponsibility by having the United States default on its obligations, we encourage the president to rescue the country." He said ultimately the courts would have to decide what authority the amendment confers on the president.
The coin idea has been mentioned by such economists as Paul Krugman, a columnist at The New York Times, and Donald Marron, the director of the Urban-Brookings Tax Policy Center.
Carney, reiterating a position the White House has taken for some time on the use of the 14th amendment, said Wednesday: "We just don't believe that it provides the authority that some believe it does."
He did not explicitly reject the trillion dollar coin idea and directed reporters to ask Treasury about the idea. But when pressed he insisted that insisted that "Congress needs to pay the bills that Congress racked up."
And as he left the White House briefing room, he added: "I answered it thoroughly, at length, with great detail. And I have no coins in my pocket, nothing."
http://www.silverdoctors.com/like-spain-the-fed-treasury-will-pull-out-nuclear-option-raid-private-pension-funds/
LIKE SPAIN, THE FED & TREASURY WILL PULL OUT NUCLEAR OPTION & RAID PRIVATE PENSION FUNDS
By AGXIIK:
The greatest issue facing us in the short pull is the very real potential of our Federal government having a failed bond auction. They may have to buy up large amounts of existing Federal debt when rates are climbing. If the Federal deficit spending continues upward at $1.7 to $2.0 trillion a year, we chance losing another rating notch or two. The equity markets and pension funds, both national and foreign, are mandated to accept only AAA bonds. They will not only be unable to buy our debt they may ultimately be forced to divest as the near-junk bond status of our debt violates their investment charter.
If this happens the Fed and Treasury are very likely to pull out the nuclear option. They will raid our private pension funds, just like Spain. They may even take foreign pensions invested in domestic funds. That’s also on the table.
This $6-8 trillion pool of private IRAs and 401Ks is the only large source of funds left outside the MMAs multi trillion dollar pools. The removal of pension funds is now established policy in Europe. This Spanish ‘theft’ of funds, done with little to no chance of repayment, is not going unnoticed in the top levels of our government and the Federal Reserve Bank. These people know that sooner than later there will be a failed bond auction or rating drop that forces their hand- and that hand will move into the pockets of the American tax payer and their private pensions. It’s big money; it’s the only money and these people know it. Call it the Failsafe option if you want. Bernanke knows this well. The vast majority of the American population is completely unaware.
“Before things get bad they get serious, then desperate.”
“When things get serious, start lying”.
It’s serious now.
On January 4, 2013, the Wall Street Journal reported that Spain is draining the fund that backs their pensions. This is a very serious statement for several reasons. Spain holds about $86 billion in pension funds. It’s quietly removing the richest source of money, called the Social Security Reserve Fund, to handle present obligations. 90% of this $86 billion has been siphoned off to date, sometimes in $3 billion amounts. These funds are used to buy some of the riskiest debt in the Eurozone; the Spanish debt. As funds are removed and replaced with junk bond status obligations, the financial analysts who follow this are quite concerned.
The SP bond income, paying 5% today, must be available to provide payments to the pensioners.
These bonds and the funds available to make payments will soon be questionable at best. As an example of the dire circumstances in Spain, in some cases the Spanish government and private business are so insolvent that their obligations are as much as 6 months in arrears. These payments include vital supplies such as food and medicine. This is causing other businesses to file bankruptcy due to delinquent payments through a downward spiral ripple effect.
The government is withdrawing funds from the Reserve faster than it is being filled by present contributions, putting in jeopardy the ability of the fund to assure its financial integrity. The reserves are running out much quicker than expected, particularly since the government has its hands fully extended into the cookie jar. There is real risk of solvency in the Reserve as it could end up like Greek pensions with their swan dive into insolvency.
The government officials making the Reserve’s investment in these bonds contend that as long as Spain can access borrowing from the external markets, this practice is prudent and can continue. They’re also confident that the economy will start to recover in late 2013. This statement is made in the face of an economy in free fall. Some experts think Spain won’t recover until 2022.
Once one reviews negative equity of the 4 major Spanish banks, the $50 billion in bank bailout fundings that accomplished little, the fact that 60% of Spain’s corporations are losing money, a few hundred billion in funds exiting the country for safer climes AND Spain has still to convince buyers to purchase over $200 billion to be issued in 2013; these assurances are weak at best.
Early in 2012 Spain received its first bailout tranche consisting of billions in funds from the ECB at 3%. Instead of using the funds to help the economy, they invested in their own government bonds. Their rates then jumped as Greece defaulted, dropping the principal value of these bond dramatically. These were to be used for collateral but when their value dropped, the lack of wisdom in those purchases became evident, forcing Spain to seek additional funds from the ECB, amongst others. It’s clear that Rajoy and his people are lacking in even the most rudimentary of economic and fiscal acumen.
As Spain raids the Reserve funds set aside for pension payments in order to stopgap and fill large budget deficits, the 5% bonds are destined to assume Greek-like devaluation. These bonds are toxic, loaded with the potential for default. The Greek government just paid $10 billion for $30 billion in debt, assuring the bond holders massive losses. This was the second massive haircut to lenders in one year. The Greeks are still delinquent in current obligations and are asking for another bailout. Spain is setting up much like Greece did in the last two years.
The math of bond yield and principal value is incontrovertible. It does not change if the country is as large as Spain with its $1 trillion Euro GDP. It just means that bond losses are magnified 1,000%. Spain’s bonds will cause massive losses in principal value with an income stream that goes to near zero. The retired people relying on these funds start jumping from their windows in desperation much like those losing their home did in the last few months.
For examples of other countries who have looted pension funds we need look no further than Argentina, where the government expropriated $30 billion to pay for government overhead. Portugal took $6.9 billion in private pensions the year before. Spain’s removal of this $75-80 billion may be the largest of its type in modern history but it will not be the last. It is a virtual certainty that when Spain’s financial difficulties come to a head, and they are getting worse, not better, the pension recipients will see a 50% drop in their income, just like the Greek pension haircuts.
I promised myself I would not write another essay about Spain, but Spain is going to find out that you don’t need a parachute to sky dive- You need one to skydive twice. They were fortunate to hit soft ground last year with several bailouts, large and small. This time they will not be so fortunate. Diving off the Iberian equivalent of the fiscal cliff will require something much more substantial than some silk and paracord.
If we look to our own financial house here in the US, Social Security has over $20 trillion in unfunded liabilities. Medicare is another $40 trillion. State pension funds are deficit to the tune of $2.7 to $3.6 trillion. If the states are intent on keeping their promises to the pension recipients it will first fall to the state tax payers to fill the gap and then to the Federal level. The tax payers will be forced to make up these differences in the long pull. But these are matters that will evolve over a decade or more.
The greatest issue facing us in the short pull is the very real potential of our Federal government having a failed bond auction. They may have to buy up large amounts of existing Federal debt when rates are climbing. If the Federal deficit spending continues upward at $1.7 to $2.0 trillion a year, we chance losing another rating notch or two. The equity markets and pension funds, both national and foreign, are mandated to accept only AAA bonds. They will not only be unable to buy our debt they may ultimately be forced to divest as the near-junk bond status of our debt violates their investment charter.
If this happens the Fed and Treasury are very likely to pull out the nuclear option. They will raid our private pension funds, just like Spain. They may even take foreign pensions invested in domestic funds. That’s also on the table.
This $6-8 trillion pool of private IRAs and 401Ks is the only large source of funds left outside the MMAs multi trillion dollar pools. The removal of pension funds is now established policy in Europe. This Spanish ‘theft’ of funds, done with little to no chance of repayment, is not going unnoticed in the top levels of our government and the Federal Reserve Bank. These people know that sooner than later there will be a failed bond auction or rating drop that forces their hand. And that hand will move into the pockets of the American tax payer and their private pensions. It’s big money; it’s the only money and these people know it. Call it the Failsafe option if you want. Bernanke knows this well. The vast majority of the American population is completely unaware.
The owners of the IRAs will be compelled, first slowly and then more rapidly, to move their hard earned monies into GRAs or other annuity funds. This expropriation has be discussed frequently at SilverDoctors. The precedents set in motion in foreign lands will make this annuity system even more palatable to those who see these private monies as a new funding source. They will be taken under the guise of Fairness, Duty and Patriotic necessities. The NDAA is just the mechanism to provide legal cover. The law is set. Once the trigger is pulled it will be too late to stop this theft.
If you agree with me and I’m wrong, then we’ll both be wrong. No harm done.
I am very confident that I am correct on this very real threat to our pensions and have planned accordingly.
And the fact that an Executive Order to attack the second amendment has been put on the table publicly , indicates this is more of an intimidation tactic to bluff Congress and the NRA..........
BIDEN: OBAMA CONSIDERING ‘EXECUTIVE ORDER’ TO DEAL WITH GUNS
Moments ago on MSNBC, VP Biden announced that President Obama is considering going after the 2nd amendment via executive order. Biden, who is scheduled to meet with execs from the NRA Thursday, stated thatPresident Obama is going to act, and that executive orders and executive action can be taken.
If team Obama/Biden are not merely bluffing regarding an executive order, it is looking more likely by the day that Obama could literally instigate the 2nd Civil War.
Biden’s full comments below:
http://www.zerohedge.com/news/2013-01-09/will-obama-use-executive-order-enact-gun-control
Will Obama Use An Executive Order To Enact Gun Control?
Moments ago, MSNBC showed a clip in which "gun tzar" VP Joe Biden made it clear that "the President is going to act" on the issue of gun control, and that "executive orders and executive action can be taken." Of course "can" does not mean "will" as the fallout from an executive order bypassing Congress would be rather dramatic, especially on a topic so near and dear to at least half of America, and the response, to put it mildly, would make thePiers Morgan vs Alex Jones screaming match seems like a tranquil discussion between two dignified stoics. If "can" however, does become "will", America may have far bigger issues over the next two months than the debt ceiling, kicking the sequester down another several months, or even the quadrillion yen tuna.
And whether trillion dollar coin or some other ram job , will the White House raise the debt ceiling unilaterally and in the face of Congressional Opposition ?
http://thehill.com/homenews/administration/276363-white-house-refuses-to-rule-out-minting-of-platinum-coin
White House declines to rule out the minting of a 'platinum coin'
By Justin Sink - 01/09/13 03:14 PM ET
The White House on Wednesday declined to rule out minting a “platinum coin” to avoid default if Congress fails to raise the debt ceiling.
Press secretary Jay Carney on Wednesday said there is “no substitute” for Congress raising the borrowing limit but declined to explicitly rule out issuing new currency to pay the government's debts.
"The option here is for Congress to do its job and pay the bill," Carney said. "There is no Plan B, there is no backup plan. There is Congress's responsibility."
A loophole in federal law — originally designed to allow for the manufacture of collectable coins — appears to give the Treasury secretary unchecked ability to mint platinum coins of any denomination. Treasury could hypothetically mint a $1 trillion coin, deposit it at the Federal Reserve and continue paying bills even if the $16.4 trillion debt ceiling is reached in a few weeks — and all without congressional approval.
The idea is getting attention from Democrats who argue President Obama should not negotiate spending cuts with Republicans in return for an increase in the debt ceiling.
Carney was asked repeatedly to clarify the White House's position on the platinum coin during his daily press briefing, but seemed to downplay — although not completely proscribe — the idea.
"You can speculate about lots of things," Carney said. "Nothing needs to come to these kinds of speculative notions about a problem that can be resolved by Congress doing its job."
House Republicans are taking note of the chatter about sidestepping Congress and plan to introduce legislation to "take the coin scheme off the table."
"This scheme to mint trillion-dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution," said Rep. Greg Walden (R-Ore.). "I’m introducing a bill to stop it in its tracks."
Democrats in Congress have begun to debate the various executive powers that Obama could invoke if the debt-ceiling isn't raised. They say the president should take executive action to prevent default and then force Republicans to take him to court.
Carney has previously ruled out the idea of the president using the 14th Amendment to continue federal borrowing once the debt ceiling is hit, an idea supported by many Democrats. Section 4 of that amendment says that "the validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
Asked Wednesday whether anyone on the White House's staff was examining the coin idea, Carney said that he did not "know of" any effort, and referred additional questions to the Treasury Department.
"The president's belief is Congress needs to do its job."
After it was pointed out that he was leaving a narrow opening for the White House to adopt the proposal, Carney shrugged and laughed.
"I think I answered it thoroughly. At length. With great detail," Carney said.
The United States hit the debt ceiling on Dec. 31, and is using “extraordinary measures” to keep the government from default. Those measures are likely to run out by mid-February or early March.
and.....
http://www.newsmax.com/Newsfront/Debt-Ceiling-Democrats-obama/2013/01/09/id/470734
White House: 'No Backup Plan' to Debt Ceiling
Wednesday, 09 Jan 2013 05:19 PM
President Barack Obama's adamant stand that he will not negotiate with Congress over raising the nation's borrowing limit and Republican demands that a debt ceiling vote be linked to spending cuts have prompted a creative outburst of alternatives to driving the country into default.
Under one proposed scenario, pushed by a number of House Democrats, the president could invoke the 14th Amendment, a post-Civil War change to the Constitution that states that "the validity of the public debt of the United States...shall not be questioned."
Another proposal would take advantage of a legal loophole meant for coin collectors and have the Treasury mint platinum coins that could be deposited at the Federal Reserve and used to pay the nation's bills.
"There is no plan B. There is no backup plan," White House spokesman Jay Carney said Wednesday. "There is no alternative to Congress raising the debt ceiling."
The government has already reached its $16.4 trillion borrowing limit and by late February or early March the Treasury Department will run out of ways to cover debts and could begin defaulting on government loans.
As of Wednesday 21 Democrats, led by Rep. Peter Welch of Vermont, had signed a letter urging Obama to invoke the 14th Amendment that they say gives him the authority to raise the debt ceiling without going through Congress. The Democrats said in a letter that they would support the use of any authority, including the constitutional provision, to prevent the nation from going into default, an event that some economists predict could trigger a global recession.
The Democrats, in their letter, said they fully supported Obama's position that raising the debt ceiling will not be subject to negotiation. "Threatening default on our nation's debt is an economic weapon of mass destruction that will have immediate and catastrophic consequences for the economy as well as America's standing in the world," they said.
Welch, in an interview, told The Associated Press said he understood that the president might not want to embrace the 14th Amendment alternative at this point, when it might appear to be a power grab. But "if there is the ultimate act of congressional irresponsibility by having the United States default on its obligations, we encourage the president to rescue the country." He said ultimately the courts would have to decide what authority the amendment confers on the president.
The coin idea has been mentioned by such economists as Paul Krugman, a columnist at The New York Times, and Donald Marron, the director of the Urban-Brookings Tax Policy Center.
Carney, reiterating a position the White House has taken for some time on the use of the 14th amendment, said Wednesday: "We just don't believe that it provides the authority that some believe it does."
He did not explicitly reject the trillion dollar coin idea and directed reporters to ask Treasury about the idea. But when pressed he insisted that insisted that "Congress needs to pay the bills that Congress racked up."
And as he left the White House briefing room, he added: "I answered it thoroughly, at length, with great detail. And I have no coins in my pocket, nothing."
http://www.syracuse.com/news/index.ssf/2013/01/house_democrats_say_president.html
WASHINGTON (AP) — House Democrats say President Barack Obama should consider invoking a little-known constitutional provision that they say gives him the power to raise the debt ceiling without going through Congress, where Republicans are demanding that a debt ceiling vote be linked to spending cuts.
The Democrats said in a letter that they would support the use of any authority, including the 14th Amendment, to prevent the nation from going into default, an event that some economists predict could trigger a global recession. That post-Civil War amendment contains a section stating that “the validity of the public debt of the United States...shall not be questioned.”
As of Wednesday 21 Democrats, led by Rep. Peter Welch of Vermont, had signed the letter.
Raising the federal borrowing limit is now subject to congressional approval, which traditionally has come with relatively little resistance. But in July 2011 Republicans tied their vote on the debt ceiling to concessions on spending, generating a confrontation with the Obama administration and resulting in the first-ever ratings downgrade of the nation’s credit-worthiness.
The government faces a similar crisis now because the $16.4 trillion borrowing limit has been reached and by late February or early March the Treasury Department will run out of ways to cover debts and could begin defaulting on government loans.
The Democrats said in a letter that they would support the use of any authority, including the 14th Amendment, to prevent the nation from going into default, an event that some economists predict could trigger a global recession. That post-Civil War amendment contains a section stating that “the validity of the public debt of the United States...shall not be questioned.”
As of Wednesday 21 Democrats, led by Rep. Peter Welch of Vermont, had signed the letter.
Raising the federal borrowing limit is now subject to congressional approval, which traditionally has come with relatively little resistance. But in July 2011 Republicans tied their vote on the debt ceiling to concessions on spending, generating a confrontation with the Obama administration and resulting in the first-ever ratings downgrade of the nation’s credit-worthiness.
The government faces a similar crisis now because the $16.4 trillion borrowing limit has been reached and by late February or early March the Treasury Department will run out of ways to cover debts and could begin defaulting on government loans.
Both in 2011 and again this year the White House has shown little interest in trying an end-run around Congress. “This administration does not believe the 14th Amendment gives the president the power to ignore the debt ceiling,” White House spokesman Jay Carney said last month.
There is no legal precedent for applying the 14th Amendment to circumvent a congressional vote and such an action would be certain to result in legal challenges.
The Democrats, in their letter, said they fully supported Obama’s position that raising the debt ceiling will not be subject to negotiation. “Threatening default on our nation’s debt is an economic weapon of mass destruction that will have immediate and catastrophic consequences for the economy as well as America’s standing in the world,” they said.
Welch said he understood that the president might not want to embrace the 14th Amendment alternative at this point, when it might appear to be a power grab. But “if there is the ultimate act of congressional irresponsibility by having the United States default on its obligations, we encourage the president to rescue the country.” He said ultimately the courts would have to decide what authority the amendment confers on the president.
There is no legal precedent for applying the 14th Amendment to circumvent a congressional vote and such an action would be certain to result in legal challenges.
The Democrats, in their letter, said they fully supported Obama’s position that raising the debt ceiling will not be subject to negotiation. “Threatening default on our nation’s debt is an economic weapon of mass destruction that will have immediate and catastrophic consequences for the economy as well as America’s standing in the world,” they said.
Welch said he understood that the president might not want to embrace the 14th Amendment alternative at this point, when it might appear to be a power grab. But “if there is the ultimate act of congressional irresponsibility by having the United States default on its obligations, we encourage the president to rescue the country.” He said ultimately the courts would have to decide what authority the amendment confers on the president.
http://www.breakingnews.com/item/ahZzfmJyZWFraW5nbmV3cy13d3ctaHJkcg0LEgRTZWVkGLSE8gsM/2013/01/09/white-house-says-we-will-not-negotiate-over-raising-the-debt-ceiling
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