AuthorTopic: The Wealth Grab  (Read 7389 times)

Offline RE

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The Wealth Grab
« on: July 05, 2014, 10:42:05 PM »
Graham Summers of Capital research is a regular contributor to ZH, and a regular predictor of Financial Doom as well.  His schtick is how you need to set up your portfolio for Doomsday.
 
In his latest piece below, Graham talks about how TPTB will come after anyone with financial assets over around $200K, striking FEAR into the Heart of every 1%er out there.

The idea here is, TPTB will do anything and everything they can to try to keep the financial system floating another day, and if that means they have to confiscate the paper wealth of 99.9% of the people with some money in the bank, they will do so.

While worrisome to the 1% crowd out there, this is probably not quite so worrisome to the .01% with wealth measured in $Billions$.  These folks are "Key Men", and though they may take a Haircut at the beginning, they won't lose it ALL.

For the average Millionaire though without the ability to sequester money in Tax Havens and the like, there is a likely chance your money will be confiscated along with the Pension Funds of J6P.

Who besides the Billionaires does NOT have anything to worry about here in such a scenario?  The 50% or more of people with either ZERO money in the bank or in Graham's analysis, less than $200K. If you go up that far, this is probably 90% of the population of the FSoA.

Anybody with a net worth BELOW $200K should be IN FAVOR of such a Haircut. Nothing to lose here for them.   So on a Democratic Level, one would expect this to be quite popular.  Not too popular an idea on Zero Hedge of course.

I will not be surprised at all if such means are undertaken to try to salvage the financial system.  I would be surprised if it actually WORKED.

The issue here is probably 99% of the Assets that will be confiscated are various forms of Irredeemable Debt.    After they Repo these Bonds and Corporate Paper you have in your Portfolio, who will they sell them to?  Certainly nobody will buy them at par, and why would the .01% buy them even for pennies on the dollar?

The deal here is of course is that such a confiscation won't Zero Out anybody's debt, certainly not the Trillions in debt of the FSoA Goobermint.  In fact, even confiscating the wealth of the .01% won't do that.  However, on the way down the Toilet here, the folks to get flushed first are those who still have some money, but little to no power as far as Da Goobermint is concerned.

If you are amongst those in the population with maybe 2 months of bills in the bank, you have little to worry about here that you are not already worried about.  If confiscating the "Wealth" of 1% of the population will keep the Banking System floating another day so you can still access your 2 months of savings, this is GOOD for you.  The worse outcome is where the whole system crashes at once and NOBODY gets out alive.

In the end, even confiscation won't work, since the resource deficit relative to population size is so great.  However, it remains a likely possibility in the spin down, so if you have assets in $200K+ territory, it's pretty likely the Tax Man Barber will arrive soon to give you a Haircut.

RE

When the Defaults Come, So Will the Wealth Grab


Submitted by Phoenix Capital Research on 07/04/2014 15:56 -0400


The biggest problem with the epic Central Bank rig of the last five years is that propping up a bankrupt financial system by printing money only works for so long.

 

The reason for this is that no one, whether it be a country, company, or person, can defy mathematics.

 

A loan can be extended, it can be restructured, or it can be finagled in countless financial ways. But at the end of the day, if your creditors lost faith in your ability to repay it… it’s GAME OVER.

 

History has shown many times that countries try to inflate their debts away until the inevitable restructuring occurs. As Argentina is now showing us, when the “D” word becomes palpable, markets move quickly.

 

Anyone who is truly concerned about their wealth in the coming years needs to assess what has happened in Europe: higher taxes on top earnings and bail-ins (meaning your bank deposits are raided to fund bank bailouts).

 

Indeed, the IMF recently proposed a “global wealth tax” to “restore debt suatainability.”

 

Here’s the critical quote:

 

Recurrent taxes on net wealth (assets less liabilities) have been declining in Europe over the last 15 years (repealers include Austria, Denmark, Finland, Germany, the Netherlands, and Sweden). But this may be changing: Iceland and Spain reintroduced the tax during the crisis, and it is now actively discussed elsewhere. (There has been interest, too, in the possibility of a one-off wealth tax to restore debt sustainability, taken up in Box 6.)

 

The revenue potential is subject to considerable uncertainty (related, for instance, to the valuation of real estate) but is in principle sizable. Based on Luxembourg Wealth Study data, a 1 percent tax on the net wealth of the top 10 percent of households could, in principle, raise about 1 percent of GDP per year…

 

TAKEN FROM PAGE 49

 

The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”—a one-off tax on private wealth—as an exceptional measure to restore debt sustainability.1 The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair)

 

TAKEN FROM PAGE 59

 

http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf

 

Anyone who has assets worth over $200,000 should note that the Governments of the world WILL be coming for your money to prop up the insolvent banks. And they’re going to be taking MORE instead of less.

 

Indeed, in the case of Cyprus, the proposed wealth tax of 7% of all deposits over €100,000 quickly rose to an incredible 47%!  Those individuals whose deposits were seized received equity in the banks themselves.

 

This scheme has been used in Spain multiple times… though the press has yet to note that when the banks FAIL, that equity is worth ZERO.

 

Cyprus has since released some of these funds though they are subject to capital controls (READ: YOU CANNOT GET YOUR MONEY OUT OF THE COUNTRY).

 

So…

 

1)   Cyprus staged a bail-in, froze accounts, and took 47% of wealth over the first €100,000.

2)   EU Finance ministers announced this policy will be a “template” for bailouts going forward.

3)   The IMF hints that a global wealth tax might be a good thing.

 

Connect the dots...
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Offline Randy C

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Re: The Wealth Grab
« Reply #1 on: July 06, 2014, 05:19:36 AM »
I'm always amused at the e-mails I get from some of these financial experts who want to tell me how to protect my "wealth" as the system falls apart.  What that tells me is that these guys have not yet come to terms with what is really happening and that their "wealth" will be worth little to nothing once the dust settles and that includes the gold and silver crowd as well.  Their "wealth" is only of use as long as the power stays on and the oil/coal/steel and other metals keep flowing.  Once that stops, food, water, lead, brass, blued steel and gun propellent will be the new wealth and since one can only stockpile so much of that we will see a somewhat more level playing field after a few months when all those wealthy people go the great beyond because they don't have the skills to adapt to the world they find themselves in. It is going to be an exciting time that is for sure....

Offline g

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Re: The Wealth Grab
« Reply #2 on: July 06, 2014, 05:37:02 AM »
I'm always amused at the e-mails I get from some of these financial experts who want to tell me how to protect my "wealth" as the system falls apart.  What that tells me is that these guys have not yet come to terms with what is really happening and that their "wealth" will be worth little to nothing once the dust settles and that includes the gold and silver crowd as well.  Their "wealth" is only of use as long as the power stays on and the oil/coal/steel and other metals keep flowing.  Once that stops, food, water, lead, brass, blued steel and gun propellent will be the new wealth and since one can only stockpile so much of that we will see a somewhat more level playing field after a few months when all those wealthy people go the great beyond because they don't have the skills to adapt to the world they find themselves in. It is going to be an exciting time that is for sure....

Yes, an exciting time indeed. No more wealthy folks except for those with the wisdom to store the new REAL wealth such as you RandyC. A wonderful level playing field as you say with folks running around with their blue steel, lead, and gun propellant and water bottles.

I can hardly wait. No more friggin wealthy people, no power, no law and order.  Just a new world with everyone equal like back in the Stone Age.  Exciting time indeed RandyC and exciting time for sure.

Offline Surly1

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Re: The Wealth Grab
« Reply #3 on: July 06, 2014, 06:11:12 AM »

In his latest piece below, Graham talks about how TPTB will come after anyone with financial assets over around $200K, striking FEAR into the Heart of every 1%er out there.

The idea here is, TPTB will do anything and everything they can to try to keep the financial system floating another day, and if that means they have to confiscate the paper wealth of 99.9% of the people with some money in the bank, they will do so.

While worrisome to the 1% crowd out there, this is probably not quite so worrisome to the .01% with wealth measured in $Billions$.  These folks are "Key Men", and though they may take a Haircut at the beginning, they won't lose it ALL.

For the average Millionaire though without the ability to sequester money in Tax Havens and the like, there is a likely chance your money will be confiscated along with the Pension Funds of J6P.

Who besides the Billionaires does NOT have anything to worry about here in such a scenario?  The 50% or more of people with either ZERO money in the bank or in Graham's analysis, less than $200K. If you go up that far, this is probably 90% of the population of the FSoA.

Anybody with a net worth BELOW $200K should be IN FAVOR of such a Haircut. Nothing to lose here for them.   So on a Democratic Level, one would expect this to be quite popular.  Not too popular an idea on Zero Hedge of course.


While normally anything is that disquiets the upper 1/10 of 1% would be a good thing in my book, I have to think that in this country, the plutocrat lobby will create some exotic new laws that have the net effect of going after 401(k) savings first. You see, too many people in this country own their own homes  as well as a handful of other assets. I'd be surprised if "we" go after the 1% before J6P has been reduced to utter serfdom.

While the mental image of one per centers squealing like so many stuck pigs is good for my daily dose of schadenfreude,  ever remember that the only people who really matter in such a scenario are the "Key Men" you reference above.  Those are the people in the lifeboat; all the rest of us are dispensable.
“The old world is dying, and the New World struggles to be born: now is the time of monsters.”

Offline jdwheeler42

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Re: The Wealth Grab
« Reply #4 on: July 06, 2014, 06:15:58 AM »
I'm always amused at the e-mails I get from some of these financial experts who want to tell me how to protect my "wealth" as the system falls apart.  What that tells me is that these guys have not yet come to terms with what is really happening and that their "wealth" will be worth little to nothing once the dust settles and that includes the gold and silver crowd as well.  Their "wealth" is only of use as long as the power stays on and the oil/coal/steel and other metals keep flowing.  Once that stops, food, water, lead, brass, blued steel and gun propellent will be the new wealth and since one can only stockpile so much of that we will see a somewhat more level playing field after a few months when all those wealthy people go the great beyond because they don't have the skills to adapt to the world they find themselves in. It is going to be an exciting time that is for sure....
Precious metals after TSHTF:

  • Stainless steel:


  • Brass:


  • Lead:


  • Aluminum:

[/list]
Making pigs fly is easy... that is, of course, after you have built the catapult....

Offline Randy C

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Re: The Wealth Grab
« Reply #5 on: July 06, 2014, 06:47:57 AM »
Surly, JD, you two are just too funny....  :icon_mrgreen:

Offline Surly1

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Re: The Wealth Grab
« Reply #6 on: July 06, 2014, 06:53:33 AM »
Surly, JD, you two are just too funny....  :icon_mrgreen:

We're here all week. Try the veal, and tip your waitresses…

 JD at least has the virtue of being correct.

Want to hedge for the future? Be long potatoes.  Or rice and beans.

Amassing a store of gold will have the virtue of making you a target.  And it couldn't happen to nicer people.
“The old world is dying, and the New World struggles to be born: now is the time of monsters.”

Offline g

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Re: The Wealth Grab
« Reply #7 on: July 06, 2014, 12:26:36 PM »
Surly, JD, you two are just too funny....  :icon_mrgreen:

We're here all week. Try the veal, and tip your waitresses…

 JD at least has the virtue of being correct.

Want to hedge for the future? Be long potatoes.  Or rice and beans.

Amassing a store of gold will have the virtue of making you a target.  And it couldn't happen to nicer people.

That certainly sounds logical, wish I had been wise enough to figure it out.

Don't hoard Gold because it will make you a target since that is what they come for, the worthless Gold. Plus you will have deserved it being a low life Gold Bug.

Hoard a sack of potatoes instead. That's the way to go. It ain't worth dick, a sack of potatoes, so they won't target  you and you will be one of the good guys as well.

Brilliant, absolutely brilliant. Makes me feel so foolish. 

                                                 
           
                                                   All I Ever Needed Was a Few Sacks of Spuds  ;D :D

Offline RE

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Re: The Wealth Grab
« Reply #8 on: July 06, 2014, 02:13:35 PM »

While normally anything is that disquiets the upper 1/10 of 1% would be a good thing in my book, I have to think that in this country, the plutocrat lobby will create some exotic new laws that have the net effect of going after 401(k) savings first. You see, too many people in this country own their own homes  as well as a handful of other assets. I'd be surprised if "we" go after the 1% before J6P has been reduced to utter serfdom.

While the mental image of one per centers squealing like so many stuck pigs is good for my daily dose of schadenfreude,  ever remember that the only people who really matter in such a scenario are the "Key Men" you reference above.  Those are the people in the lifeboat; all the rest of us are dispensable.

As I have mentioned before, McMansions are not Assets, they are liabilities.

Pension Funds are invested in stuff like Facepalm, PoopOn and Municipal Bonds.  They are basically worthless.

I do expect a confiscation of many perceived assets, but I don't think it will work very long to salvage the system once the cascade begins in earnest.

What is getting interesting is that the talk of "De-dollarization" is spreading, now the Frogs have picked up the Banner with Vlad the Impaler and the Chinese.  The Financial WWIII game is picking up just as fast as the physical one, if not faster.

The biggest real asset left in the Industrial Economy are what's left of the Oil in the ground and the refineries and transport system for this stuff.  This of course is what the big boys are fighting for control over.  He who controls this is the one that can issue the credit to buy it.  That credit obviously does not have to be in dollars.

NATO does appear to be losing control over MENA on the regional rather than nation-state level now.  If ISIS will take Renminby for Oil rather than Dollars and there is no convertability, then you would have a mighty crash indeed.  However, with what will the Chinese buy Food with from the FSoA?

The Big Show is underway here now.

RE
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Offline g

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Re: The Wealth Grab
« Reply #9 on: July 06, 2014, 02:27:27 PM »

While normally anything is that disquiets the upper 1/10 of 1% would be a good thing in my book, I have to think that in this country, the plutocrat lobby will create some exotic new laws that have the net effect of going after 401(k) savings first. You see, too many people in this country own their own homes  as well as a handful of other assets. I'd be surprised if "we" go after the 1% before J6P has been reduced to utter serfdom.

While the mental image of one per centers squealing like so many stuck pigs is good for my daily dose of schadenfreude,  ever remember that the only people who really matter in such a scenario are the "Key Men" you reference above.  Those are the people in the lifeboat; all the rest of us are dispensable.

As I have mentioned before, McMansions are not Assets, they are liabilities.

Pension Funds are invested in stuff like Facepalm, PoopOn and Municipal Bonds.  They are basically worthless.

I do expect a confiscation of many perceived assets, but I don't think it will work very long to salvage the system once the cascade begins in earnest.

What is getting interesting is that the talk of "De-dollarization" is spreading, now the Frogs have picked up the Banner with Vlad the Impaler and the Chinese.  The Financial WWIII game is picking up just as fast as the physical one, if not faster.

The biggest real asset left in the Industrial Economy are what's left of the Oil in the ground and the refineries and transport system for this stuff.  This of course is what the big boys are fighting for control over.  He who controls this is the one that can issue the credit to buy it.  That credit obviously does not have to be in dollars.

NATO does appear to be losing control over MENA on the regional rather than nation-state level now.  If ISIS will take Renminby for Oil rather than Dollars and there is no convertability, then you would have a mighty crash indeed.  However, with what will the Chinese buy Food with from the FSoA?

The Big Show is underway here now.

RE

Things are cascading out of control, and rather quickly in my view as well. To say I sense a horror developing is an understatement for sure.

Our MSM is treating this stuff as a side show, what else is new, but it has the acrid smell of war and economic trouble simultaneously fouling the air.

What is going on in the minds of Israel and Saudi Arabia as well for a few more loose cannons or wild cards to mull over?

Read Mr Kunstler's latest for more on this interested Diners.  http://www.doomsteaddiner.net/blog/2014/06/30/voila-world-war-three/   :icon_study: :icon_study: :'(
« Last Edit: July 07, 2014, 02:13:34 AM by Surly1 »

Offline RE

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Re: The Wealth Grab
« Reply #10 on: July 06, 2014, 03:10:49 PM »

Things are cascading out of control, and rather quickly in my view as well. To say I sense a horror developing is an understatement for sure.

Our MSM is treating this stuff as a side show, what else is new, but it has the acrid smell of war and economic trouble simultaneously fouling the air.

What is going on in the minds of Israel and Saudi Arabia as well for a few more loose cannons or wild cards to mull over?


It's definitely spreading fast now. I'm turning this thread into a rant as we speak.

RE
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Offline g

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Re: The Wealth Grab
« Reply #11 on: July 06, 2014, 03:28:33 PM »

Things are cascading out of control, and rather quickly in my view as well. To say I sense a horror developing is an understatement for sure.

Our MSM is treating this stuff as a side show, what else is new, but it has the acrid smell of war and economic trouble simultaneously fouling the air.

What is going on in the minds of Israel and Saudi Arabia as well for a few more loose cannons or wild cards to mull over?


It's definitely spreading fast now. I'm turning this thread into a rant as we speak.

RE

While realizing you are on the left RE, please don't leave out the total ass holes we have at the helm right now in your rant.

Yes Agreed Bush and Cheney were total ass holes as well.

These people are totally fucking clueless. They have nothing on their petty minds but the upcoming elections. Totally incompetent and lost.  :( :( :-\ :exp-angry:

This Kerry should be running a lemonade stand on the White House Lawn.

Offline RE

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Re: The Wealth Grab
« Reply #12 on: July 06, 2014, 03:42:02 PM »

Things are cascading out of control, and rather quickly in my view as well. To say I sense a horror developing is an understatement for sure.

Our MSM is treating this stuff as a side show, what else is new, but it has the acrid smell of war and economic trouble simultaneously fouling the air.

What is going on in the minds of Israel and Saudi Arabia as well for a few more loose cannons or wild cards to mull over?


It's definitely spreading fast now. I'm turning this thread into a rant as we speak.

RE

While realizing you are on the left RE, please don't leave out the total ass holes we have at the helm right now in your rant.

Yes Agreed Bush and Cheney were total ass holes as well.

These people are totally fucking clueless. They have nothing on their petty minds but the upcoming elections. Totally incompetent and lost.  :( :( :-\ :exp-angry:

This Kerry should be running a lemonade stand on the White House Lawn.

The rant is rather apolitical in terms of Left-Right, Rep-Dem Blame Game goes.  It's more economic in nature.

RE
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Offline g

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Re: The Wealth Grab
« Reply #13 on: July 06, 2014, 04:10:22 PM »
Quote
The rant is rather apolitical in terms of Left-Right, Rep-Dem Blame Game goes.  It's more economic in nature.

RE

Was referring to their inability to act in decisive statesmanship demeanor.  Asserting leadership, utilizing diplomacy, comprehending, analyzing and producing something coherent and productive rather than this sanctions nonsense, and as JHK say's even analyze what were are doing meddling in the first place, before adding to the flames. Blame was not on my mind but inability to do something constructive and positive rather than make it worse.


Offline MKing

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Re: The Wealth Grab
« Reply #14 on: July 06, 2014, 04:27:51 PM »
As I have mentioned before, McMansions are not Assets, they are liabilities.

Depends on how much you owe on it I imagine, and what it is worth. Certainly this doesn't work as a blanket statement as long as you can sell it. And folks certainly are. Of course, you have to live in some areas with the proper economic mix capable of buying such properties, might be difficult to sell 7 figure homes in rural Kentucky.

Quote from: RE
Pension Funds are invested in stuff like Facepalm, PoopOn and Municipal Bonds.  They are basically worthless.

Mine aren't. So obviously not ALL pension funds fit your generalization. And as long as I can sell the stock in the companies or bonds mentioned, of course they aren't worthless. This one you can prove for yourself…collect one tomorrow…put it up for sale next week. Guess what….it will sell for some amount, you might make a little, or lose a little, but they are certainly worth something. Just as they have been for…well…as long as you've been alive.

I recommend staying away from playing this game in politically unstable areas, might not work out so well.

Quote from: RE
I do expect a confiscation of many perceived assets, but I don't think it will work very long to salvage the system once the cascade begins in earnest.

LATOC expected the same, along with a draft, Fedghettos, all the usual doomer stuff. Didn't happen then. You don't believe it now, but I understand your specialty as of late is in sales, and you and i know how sales works….certainly it doesn't have much to do with reality or facts, but perception, fear, guiding the fear in a direction to your advantage, etc etc.

Quote from: RE
What is getting interesting is that the talk of "De-dollarization" is spreading, now the Frogs have picked up the Banner with Vlad the Impaler and the Chinese.  The Financial WWIII game is picking up just as fast as the physical one, if not faster.

Remember when the Iranians were forever opening an oil bourse? Yeah…such things are certainly neat, and hopefully they will happen sooner rather than later. The US wins games of economic and military competition, and it is hard to even TRY without others around to push against.

Quote from: RE

The Big Show is underway here now.

RE

Yeah, LATOC ran around claiming that as well. But to say it nowadays…might be because you didn't jump into the stock market with both feet after the LAST claims of gloom and doom? Does wonders for one's net worth, you should give it a whirl…of course, what with the market highs and whatnot, you need to wait until this "underway" really IS, and I don't mean just a little, but a BUNCH…so that the herd bolts. Claiming its "underway" during all time stock market highs isn't useful at all, but good luck to you. Carve 8000 points out of the market, get everyone on your side, and then you, me and Eddie's wife can ALL make a mint on the next cycle.
Sometimes one creates a dynamic impression by saying something, and sometimes one creates as significant an impression by remaining silent.
-Dalai Lama

 

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