Is This How Governments Will Destroy Your Nest Egg?

Governments around the world are spending billions of tax-payers money propping up their financial systems. It’s a financial black hole with the money disappearing into it as fast as it is printed.

They may save the world financial system but the world economy may well die in the process. There could be years of poor economic performance due to the enormous debts nations are taking on bailing out the financial system.

The more they fiddle, the harder it might be to recover from this mess.

Here is a hypothetical.

Baby Boomers should be very concerned if they have any significant savings in private pension funds. There is likely to be a massive grab for cash by governments around the world once they have exhausted their willingness to print money.

Governments will begin to eye all that money in private pension funds that is sitting there waiting for the stock market to come back.

The first step governments will take is to remove any tax concessions on pension funds. This will deter Baby Boomers from putting more money into these funds.

Governments will drop Interest rates so low that bank deposits will be unattractive.

The amount of money that has been pumped into the market will cause inflation to rise.

Governments will then offer inflation-indexed guaranteed government pension funds as alternatives to private pension funds and at very low fees.

They will pay retired Baby Boomers a regular inflation-adjusted income based on their contribution.

They will claim the private funds have not protected your money and discredit them.

Since the stock market is unlikely to be bullish for some time the returns from private pension funds will be far worse that the government pension fund.

So Baby Boomers will begin to invest their money into the government pension fund.

Then governments will offer favourable terms to transfer the rest of your nest egg money from private pension funds to the government pension funds.

Once the Government has full control of your nest Egg it will pass laws limiting how much you can withdraw of your own money to “protect the pension fund for the good of all”.

They will decide how much you can take as a pension from your own money.

This is how they will distribute the wealth and protect themselves from failing to provide everyone with a pension.

Baby Boomers who worked hard  and saved for they retirement will be no better off that those that spent everything they had.

So far Argentina appears to be taking the first steps to confiscating private pensions. The US Congress  is considering dropping tax concessions on 401(k) Retirement Plans.

Where the US goes the rest of the Western world is likely to follow.

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