Wednesday, May 06, 2009
Will Obama Seize Americans’ 401k and IRA Funds?
Wednesday, May 6, 2009
There is a rumor floating around that Obama will seize Americans’ retirement funds, like Argentina and some other countries have done.
Two investment newsletters - Green Chip Review and The Mining Speculator - have recently claimed that the 401k seizure is a sure thing.
Is this just crazy talk, or is there something to it?
And in October of 2008, the idea of confiscating private 401k and IRA accounts and replacing them with government accounts gained wide traction. See this, this, this, and this.
But are those plans still in the works, or has the idea been abandoned?
In January, Larry Grossman, Managing Director of Sovereign International Pension Services, said:
There have been several different academic papers published over the last few months, which have given rise to rumors such as these. At this point in time I am unaware of any such pending legislation.
But Grossman doesn’t rule out the possibility.
And former U.S. congressman Bob Bauman (also of the Sovereign Society) thinks anything is possible :
It is possible that some brainless members of the U.S. Congress may have introduced a bill that seeks to nationalize pensions, but I hope that it will not be given serious consideration, even by the liberal Democrat majority now in control…
I served in the U.S. Congress when Democrats were in control and I’ve seen what happens when the Republicans are in charge. Meaning simply; anything can happen!
So will Obama seize Americans’ retirement funds or not?
The bottom line is that I don’t think anyone outside of government knows right now. This is more than just a wild rumor (as the government was seriously considering it in October) but it is not confirmed that the government is still eager to carry it out.
On the one hand, seizure of retirement funds would dramatically undermine confidence in America’s financial system, and so it is hard to believe that the government would do it in the immediate future.
On the other hand, Congressman Bauman and Larry Grossman suggest transferring your retirement assets offshore just to be safe.
Note: I am not an investment advisor and this should not be taken as investment advice