Where the money is....

When Willie Sutton bank robber was asked why he robbed banks he said "Because that is where the money is". How things have changed.

The banker's Bank the Federal Reserve is now robbing savers with near zero interest rates. Why? Because that is where the money is. It is a hidden tax. No law was passed. Still you are having the your money stolen through near zero interest rates to restore bank's balance sheets. If you had $300,000 in an IRA (or 401k) earning 5% in 2007 ($18,000 a year with nearly no risk) you are lucky if you earn half that today. That is a $9,000 or more of hidden taxes.

I hope to expose these types of actions and others by the FED and government. Boomers need to be vigilant - because their savings is where the money is. I will also delve into other areas of finances of interest to Boomers.

Thursday, February 17, 2011

The cruelest thing of all

You can talk about "death panels" or insufficient medical coverage, but the cruelest thing of all for those retired (or ready to retire) can be inflation.  For the second year in a row there was no COLA increase for SS recipients.  Yeah - OK- there was an oversized increase due to a spike in oil prices 3 years ago, but that has been more than offset by an increase in medical and food prices the past 2 years.

Insufficient medical coverage may mean you die quickly.  Insufficientt income means you live in misery as you can not afford food or other necessities such as heat or air and die slowly.  Which is worse?

So, if you have extra income you may want to save it instead of taking that expensive cruise or a week gambling in Nevada.  Or, spend a weekend in Nevada and an inexpensive 3 day cruise and save the difference.  Things are going to get worse not better when it comes to inflation.  The FED is pumping money into the system.  Because the velocity (turnover) of money is low the full impact of these actions have not been felt yet (but they will).  The FED claims they can draw down the money supply in time to prevent this inflation.  Yeah, right.  If they are so darn good why didn't they prevent the housing bubble by tightening credit conditions in 2005 or 2006?

If you are just in the planning to retire stage - you need to insure you have enough income that will allow you to continue to save and build your retirement base for the next 5-10  years (maybe more) so you don't end up in poverty and dire straits at the end of your life.  Work an extra year?  Maybe.  Sell that McMansion and downsize to less expensive housing and invest any extra proceeds?  Maybe.   I do not know your individual situation so I can only advise in a general way.

At this time my basic living costs are about 50% of my available income.  Am I concerned?  You better believe I am.  I am taking or planning to take actions to minimize my income needs.  By mid year I will have at least 6 months of extra food in the cupboard.  I am  looking to buy some land so I can raise a good portion of my own food (potatoes, onions, corn, beans, tomatoes, cucumbers, etc)/. Plant some fruit trees (apple, peach, plum, pear, cherry).  Also, have grape vines, berry plants, strawberry plants, etc.  Buy a good sized freezer for keeping food.  Raise some chickens for eggs and meat?  Buy a pressure cooker for canning.  In other words - become as self sufficient as possible in ways that do not depend upon income.

Now I know not all of you have the health, desire or knowledge to do these things.  But, you need to make preparations.  Build up a stash of food that will last a few months at least.   Otherwise, start collecting recipes for Alpo.


Prepare to see to your own needs.  The government is BROKE and you cannot expect them to do so.

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