Skip to comments.IMF paper warns of 'savings tax' and mass write-offs as West's debt hits 200-year high
Posted on 01/05/2014 3:25:47 AM PST by Neil E. Wright
Much of the Western world will require defaults, a savings tax and higher inflation to clear the way for recovery as debt levels reach a 200-year high, according to a new report by the International Monetary Fund.
The IMF working paper said debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, either negotiated 1930s-style write-offs or the standard mix of measures used by the IMF in its toolkit for emerging market blow-ups.
The size of the problem suggests that restructurings will be needed, for example, in the periphery of Europe, far beyond anything discussed in public to this point, said the paper, by Harvard professors Carmen Reinhart and Kenneth Rogoff.
The paper said policy elites in the West are still clinging to the illusion that rich countries are different from poorer regions and can therefore chip away at their debts with a blend of austerity cuts, growth, and tinkering (forbearance).
The presumption is that advanced economies do not resort to such gimmicks such as debt restructuring and repression, which would give up hard-earned credibility and throw the economy into a vicious circle.
(Excerpt) Read more at telegraph.co.uk ...
To which I say:
Where liberty dwells, there is my country." Benjamin Franklin
Not sure what’s in store for us, but it is not going to be pretty.
As noted philosopher Jim Morrison posited in Roadhouse Blues, “the future’s uncertain and the end is always near”.
Yeah. This is going to be ugly. By sheer hard work, grit, and determination (and being blessed to have grown up in the old USA) I have managed to do ok- not great- for myself. Still, that puts a target on my back and I know my 401k will be confiscated.
Debt we incured by foreign aid... gaming the Marxist booksnof owing reparations...
It is a world fascist system. Banks expect tax payers to bail them out for bad government service of debt... because government insures that taxpayers will pay back the loans... just like walmart loves the foodstamp revenue base.
“The IMF working paper”
What Egg Head group of Fascists wrote it?
Setting us up for confiscation could be and will be very dangerous for them.
Oh, I figured it out.
I miss spoke, they are not Egg Head Fascists at all. They are pin head Fascists. Here is the book they wrote that says the world has been doing it wrong for 800 years, because they are smarter than those preceeding them.
This Time is Different: Eight Centuries of Financial Folly
” . . . has become so influential that when somebody says, ‘We live in a Reinhart-Rogoff world,”
God Help US.
“As noted philosopher Jim Morrison posited”
This is the end, my friend, of our elaborate plans. The End
Can’t wait to see what the global “brain trust” concludes is best for us. I’ll guess higher taxes and rape are on the menu
Then take it out now. Put it into gold and silver. 90% of something is better than having 100% of nothing.
Don’t worry yourself about a withdrawal penalty. Think of it as a premium payment on an insurance policy against a corrupt government. The confiscation of your hard earned savings would be much, much worse.
Truth is, IRAs, 401Ks, pension plans, etc., are the only source of wealth that is currently outside of the direct control of the "government" and any wealth "they" don't control is something they cannot allow. It means that whoever does control that personal wealth is someone who doesn't need what they're selling.
well, I've got this to say to "them" "Póg Mo Thóin"
Even broke, I won't buy what you're peddling, asswipes!
“Póg Mo Thóin”
He means “Kiss my a**’.
True, but when I post it in Gaelic, I don’t run afoul of the posting rules (not that I’m implying that the moderators are dumb or stupid or anything like that, mind you). :)
“...Much of the Western world will require defaults, a savings tax and higher inflation to clear the way for recovery...”
Uh, ya, I guess total collapse would proceed recovery.
I suspect that the way it will be done is turn it into an annuity. That will pay a percentage every year, but when you die that principal is gone.
I have very little 401K money in two small accounts. I'm old enough for no penalty, so I transferred one out for 2014 and the other one I'll probably take out in 2015.
It's that Roth IRA money they'll have a tough time getting from already-senior citizens. If there are any rumblings about pulling something with that, we can transfer it out without penalty. Younger people would be stuck.
For those under age 60 or so, I wonder if it makes any sense to put money in retirement accounts.
The authors of this paper can’t program an Excel spreadsheet. Look it up.
Out betters are monumentally vain.
The problem with confiscating 401k accounts is that there will be some warning and people will begin converting their accounts to cash. The resulting stock market crash will be worse than the Great Depression.
Some might say there will be no warning but the government is not capable of keeping a secret. The answer is to keep a diversified portfolio of assets from 401k money to real estate, metals, art, cash and others. The problem is that when it starts to unravel, everything but food and ammo goes down.
There was a Far Side cartoon with the caption “The REAL end of The Ant and The Grasshopper”. It pretty much sums up what’s going to happen.
Thanks. Great points. I have a plan in place. It will take three years. White knuckle race against the coming collapse, but I try to stay optimistic.
Ha! Those are the taunts I toss out to my commie colleagues at work. I am heavily outnumbered but delight in some good natured ribbing. My particular favorite targets are today’s young men. WTH? 12 inch arms? I am 50 and can still hold down a spot on the O-line. I invite them to come out to NW jersey and fire off shotguns. I think they pee themselves.