401k alternatives

Posted in the Walgreens Forum

grumpsmcgeek

Deerfield Beach, FL

#1 Feb 12, 2013
The angst we all find ourselves in is that not only our futures have bleakened, but the blood, sweat, and toil of our past labor is being stolen. These profit sharing plans really offer only an illusion of safety. The accounts may go up nominally, but in real terms they are being ass-raped by inflation. And there is always that spectre of a govt willing to magnanimously "manage" our 401k's from market volitality.

To understand what the Fed is doing and the End Game, the latest from QBAMCO does a great job:
http://www.scribd.com/doc/125000260/QBAMCO-Lo...

Also to help get newbies up to speed on what the special relationship between Saudi Arabia and US and why our 8100 tons is already gone, the latest post on FOFOA is a good condensation.
http://fofoa.blogspot.com/2013/02/think-like-...

Be your own Central Bank. Fix your balance sheet the same way the CB's will. Gold is a swing asset they will use to match overwhelming liabilities.

Check this out: http://www.longwavegroup.com/market/charts/_p...

Since: Nov 12

Location hidden

#2 Feb 12, 2013
inflation has averaged what, 2.5% historically and the stock market has averaged 7-8%? Does that count as an ass raping? Or would that just be considered a mild fingering of the anal area?
grumpsmcgeek

Deerfield Beach, FL

#3 Feb 12, 2013
Since 1980 the CPI has been massaged to hide true inflation. JohnWilliams over at Shadowstats has the true CPI if it was calculated as in 1980. Right now it's about 9-10%.

http://www.shadowstats.com/alternate_data/inf...

If you look closely the chart shows that CPI was 2.5% for just a moment in 86-87. Otherwise it looks like CPI averaged 7 to 9%.
grumpsmcgeek

Deerfield Beach, FL

#4 Feb 12, 2013
The real money to be made was probably in long bonds from 82 till now. Hell, interest rates have come from 15% to 3% on the 30year.

http://research.stlouisfed.org/fred2/graph/...

The 10 year bond went from 15% in 1982 to as low as 1.45% recently.

http://research.stlouisfed.org/fred2/graph/...
cvsgirlhere

Chicago, IL

#5 Feb 12, 2013
disgovernment wrote:
inflation has averaged what, 2.5% historically and the stock market has averaged 7-8%? Does that count as an ass raping? Or would that just be considered a mild fingering of the anal area?
You know what? You are funny even though I really don't see your political point of view. I think you should start a blog because I would be curious about your ideas on things. People get so upset if someone does not agree with them on everything, and never even take the time to listen to another view or even find humour in things said. And to think this is a forum where the exchange of ideas is the real point of it all. In some countries, it is not even a thought to go against the grain. This is why I love being here. I can agree to disagree without being disagreable. I just started reading this forum because I had a job offer. I am getting a feeling for the pulse of the walgreens employees reading these topics. You do not sound unhappy with your job.
grumpsmcgeek

Deerfield Beach, FL

#6 Feb 12, 2013
From the Bernank's 2002 speech, Deflation: Making Sure "It" Doesn't Happen Here.

"The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

Do you see what's coming?

Since: Jul 12

Location hidden

#7 Feb 12, 2013
cvsgirlhere wrote:
<quoted text>
You know what? You are funny even though I really don't see your political point of view. I think you should start a blog because I would be curious about your ideas on things. People get so upset if someone does not agree with them on everything, and never even take the time to listen to another view or even find humour in things said. And to think this is a forum where the exchange of ideas is the real point of it all. In some countries, it is not even a thought to go against the grain. This is why I love being here. I can agree to disagree without being disagreable. I just started reading this forum because I had a job offer. I am getting a feeling for the pulse of the walgreens employees reading these topics. You do not sound unhappy with your job.
That's because he's a store manager... who can be unhappy with a cush schedule and a decent wage?

Actually, disgovernment is alright most of the time.
grumpsmcgeek

Deerfield Beach, FL

#8 Feb 12, 2013
Hey guys check out Bernanke's 2002 speech, Deflation: Making Sure "It" Doesn't Happen Here .

http://www.federalreserve.gov/boardd...21/def...

He spells it out what he is going to do.
1. Buy US debt and Agency debt ( Fannie mae/Freddie mac) check

2. Operation Twist check

3. Corporate Debt (not yet, but wait til high grade and junk debt starts slipping)

4. Swaps with commercial banks...cash for commercial paper, car loans, mortgages, helocs, perhaps student loans maybe???(yet to come)

5. Foreign debt ( we are kind of doing this now by proxy with currency swaps and some of the QE money in that a US branch of DeutscheBank is unloading MBS paper unto the Fed and using that money to buy Eurobonds)

6.Affect the exchange value of the dollar ( Gold operations, he references FDR's revaluation of gold) " A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3 percent in 1932 to -5.1 percent in 1933 to 3.4 percent in 1934.17 The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt's devaluation. "

Oh but wait, here's the best part in the two paragraphs for Fiscal Policy:
" Fiscal Policy
Each of the policy options I have discussed so far involves the Fed's acting on its own. In practice, the effectiveness of anti-deflation policy could be significantly enhanced by cooperation between the monetary and fiscal authorities. A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman's famous "helicopter drop" of money.18

Of course, in lieu of tax cuts or increases in transfers the government could increase spending on current goods and services or even acquire existing real or financial assets. If the Treasury issued debt to purchase private assets and the Fed then purchased an equal amount of Treasury debt with newly created money, the whole operation would be the economic equivalent of direct open-market operations in private assets. "

Did you catch that? Even if the public uses the cash from tax cuts or transfer payments and buys real assets (gold) this will improve their balance sheet. Even if the public doesn't, the Fed will enable the Treasury to do it and conduct gold operations. The Bernank is telling you what to do.
chip

Shawnee, KS

#9 Feb 12, 2013
grumpsmcgeek wrote:
Since 1980 the CPI has been massaged to hide true inflation. JohnWilliams over at Shadowstats has the true CPI if it was calculated as in 1980. Right now it's about 9-10%.
http://www.shadowstats.com/alternate_data/inf...
If you look closely the chart shows that CPI was 2.5% for just a moment in 86-87. Otherwise it looks like CPI averaged 7 to 9%.
If you figure the inflation rate at around 10% which you claim is close, a $10,000 car in 1980 would go for upwards of $200,000 now. Even at 5% a 10k car would be above 40k. FTY the average price of a car in 1980 was about 7500, the average car doesn't go for 30k now so your numbers are a little made up.
mrwaggers

United States

#10 Feb 12, 2013
Wtf..people rant about interest rates ...yes we know they are low and virtually non existent..and there are some alternatives to make some better returns than banks but people can still save money. It will grow. that's the simple concept everyone misses.you dont have to spend your whole check every week.

Since: Nov 12

Location hidden

#11 Feb 12, 2013
@cvsgirl. Yeah well, I was an anarchist when I was a teenager.(Anarchy as a political concept, not as chaos.) Now that I'm older, I've softened into a libertarian. My parents are two FAR left liberals who taught me to question things, which I did, and eventually it led me to question them.

The truth of the matter is that I don't enjoy my job as much as I did when I first started over 10 years ago. The company used to be a little more wild and free. Starting in about 2008, it has become just a job to pay the bills.

However, what I DON'T do, is pretend that Walgreens is much worse than any other company. I do think they needed to change to survive. I don't pretend that they give a crap about me. As with most jobs, it only matters what you've done for them lately. Getting ahead in this company (like many companies) is more about "playing a game" and who you know, than actually how good you are.

I've had one rule in life about jobs. Never carry more personal things into a job than you can bag up and walk out with in less than 60 seconds.
grumpsmcgeek

Deerfield Beach, FL

#12 Feb 13, 2013
chip wrote:
<quoted text>
If you figure the inflation rate at around 10% which you claim is close, a $10,000 car in 1980 would go for upwards of $200,000 now. Even at 5% a 10k car would be above 40k. FTY the average price of a car in 1980 was about 7500, the average car doesn't go for 30k now so your numbers are a little made up.
Inflation has been muted in some products due to globalization and labor arbitrage, hence record corporate profits. Inflation has shown up in oil $10...$100
health insurance...masked by employers footing the bill
college education
prescription medication
stocks dow 1000...dow 14000
portion size of grocery items(more packaging/less product

households need two incomes
government has gotten bigger
debt levels has gone from 1 Trillion to 50 Trillion
OTC derivatives over 1.4 quadrillion

Some of this inflation is outside the country showing up as food inflation in MENA and Asia, the impetus for political strife.
grumpsmcgeek

Deerfield Beach, FL

#13 Feb 14, 2013
What's with all the mergers and acquistions lately? One debt-laden behemoth swallowing another. What do they know? What's coming? Currency devaluation? Makes sense if the debt is going to be marked down. Might as well go on a shopping spree.
grumpsmcgeek

Deerfield Beach, FL

#14 Feb 14, 2013
Ok, so I guess everyone's bulked up doing curls with their massive 401k statements. Wow, 1000 Dow points YTD. I wonder if 160 Billion added to the Fed balance sheet has anything to do with it? Who cares, let's party like it's 1999.
grumpsmcgeek

Pompano Beach, FL

#15 Feb 21, 2013
PAAS Pan American Silver just increased dividend by 150% in spite of 2 year consolidation in silver price.

Get paid while you wait for Fed gold operations.

Since: Nov 12

Location hidden

#16 Feb 21, 2013
Grumps, you know the only thing that any two economists agree on, right? That is that no two economists agree.

I admire your study of economic markets; unfortunately, they have such a degree of chaos and complexity that you can only makes guesses and broad generalizations.

The outcome of economics, to me, isn't nearly as important as the practices. I support free markets and let the chips fall where they will.
grumpsmcgeek

Pompano Beach, FL

#17 Feb 21, 2013
Oh, disgovernment, economics is actually very simple right now. It's the economists/high priests that want to mystify and confuse us shrimps.

Just read Ben's deflation speech from 2002.
http://www.federalreserve.gov/boarddocs/speec...

A pattern I see now is that the Fed plays good cop at FOMC meetings( QE forever) and then uses the Fed minutes to play bad cop (QE will be altered/stopped). This is just to keep the market from figuring out the end game in hopes that maybe another virtuous credit cycle can be ignited. But mathematically it is impossible because of the Fed's balance sheet. This Zero hedge article plainly explains the box the Fed is trapped in.
http://www.zerohedge.com/news/2013-02-19/feds...

If the Fed allows rates to rise, its interest liability on excess reserves goes up while the prices of all the bonds it holds as assets goes down. To avoid bankruptcy it will have to revalue its gold certificates which it currently holds at a mere $11 billion.[Fed still values gold at $42/oz].http://www.federalrese rve.gov/releases/h41/current/ See line for gold stock.
grumpsmcgeek

Pompano Beach, FL

#18 Feb 21, 2013
http://www.federalreserve.gov/releases/h41/cu...

fixing that link in last paragraph
grumpsmcgeek

Deerfield Beach, FL

#19 Feb 25, 2013
This is from Jmaes Conrad, Dean of the School of
Business Administration at the University of Indianapolis:

"Anyone who reads the written works of our Fed Chairman will know that Bernanke’s long term plan involves devaluing the dollar against gold. This is the exact opposite of the position of most prior chairmen. He has overtly stated his intentions toward gold, many times, in
various articles, speeches and treatises written before he became Fed Chairman. He often extols the virtues of F. D. Roosevelt’s gold revaluation/dollar devaluation back in 1934, and credits it with saving the nation from the Great Depression. According to Bernanke,
devaluation of the dollar against gold was so effective in stimulating economic activity that the stock market rose sharply in 1934,
immediately thereafter. That is something that the Fed wants to see happen again.

It is only a matter of time before gold is allowed to rise to its natural level. Assuming that about one half of the recent increase in Federal
Reserve credit is neutralized, the monetized value of gold should be allowed to rise to between $7,500 and $9,000 per ounce as the world
goes back to some type of a gold standard. In the nearer term, gold will rise to about $2,000 per ounce as the Fed abandons its hopeless
campaign to support Comex short sellers in favor of saving the other, more productive, functions of various banks and insurers.

Revaluation of gold, and a return to a gold standard, is the only way that hyperinflation can be avoided while large numbers of paper
currency units are released into the economy. This is because most of the rise in prices can be filtered into gold. As the asset value of gold
rises, it will soak up excess dollars, euros, pounds, etc., while the appearance of an increased number of currency units will stimulate
investor psychology; and lending and economic output will increase all over the world. Ben Bernanke and the other members of the FOMC
Committee must know this, because it is basic economics."
grumpsmcgeek

Deerfield Beach, FL

#20 Feb 25, 2013
Even a MI-6 agent, Ambrose Evans-Pritchard of the International Business Editor, gets it.

"A new paper for the US Monetary Policy Forum and published by the Fed warns that the institution's capital base could be wiped out "several times" once borrowing costs start to rise in earnest...Investors have of course been fretting about this for some time. Scott Minerd from Guggenheim Partners thinks the Fed is already trapped and may have to talk up gold to $10,000 an ounce to ensure that its own bullion reserves cover mounting liabilities. "

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