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The Four Debts

FDR had his Four Freedoms, and we now have four components of the “official” national debt. Go read The Four National Debts, by Kevin D. Williamson. Key excerpt, emphasis added:

TIPS [Treasury Inflation Protected Securities] are a mixed bag, in five-year, ten-year, and 30-year versions. TIPS are a relatively new thing, having been introduced in 1997. They’ve grown popular, from accounting for $33 billion of the national debt in their first year to $640 billion as of March 2011.

Hmm, what exactly is a TIPS?

Treasury Inflation-Protected Securities (or TIPS) are the inflation-indexed bonds issued by the U.S. Treasury. The principal is adjusted to the Consumer Price Index, the commonly used measure of inflation. The coupon rate is constant, but generates a different amount of interest when multiplied by the inflation-adjusted principal, thus protecting the holder against inflation.

So the government publishes an inflation rate, but that inflation rate influences how much they owe, and they control the interest rate, and the popularity of TIPS is growing…

Concerned American is fond of the phrase “Do you understand yet?”, so rather than use his, I’ll coin my own:

Are you tracking?

Here’s what I track:

  • They’ll keep interest rates artificially low so they can roll over the debt.
  • They’ll intentionally under-report inflation so they don’t have to pay out on the debt (essentially making you eat the price increase with your 401k meal)
  • If you stop buying the TIPS, the Fed will buy them, enabling more debt.

I see retirement fund seizure coming in 5 … 4 … 3 …

Categories: Uncategorized
  1. 21 April 2011 at 18:16

    The mechanisms are already in place. Banks/government (one and the same?) can freeze “sweep” accounts and prevent withdraws. Every penny in 401k mutual funds goes into a sweep account when it is sold. Even if you sell all funds, you might not be able to withdraw.

    I would withdraw everything right now, but I cannot unless I quit my job. I’ve taken out what I can; the rest remains growing by leaps and bounds. Everything I have in my retirement account is positioned to bet against the dollar. Silver, oil, bearish dollar ETFs…

    Betting against the dollar has netted me overall about a 40% return in the past six months. I would rather take it out of the market and buy tangibles, but I can’t.

    I agree with you. Retirement fund confiscation is coming soon.

    That would be outright theft, and blatant justification for active resistance.


  2. 21 April 2011 at 18:18

    And, BTW, I am “tracking”.

    Like a TOW missile.

    Sorry. I spent a few years as a TOW missile gunner. Couldn’t resist.


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