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Wednesday, April 22, 2009

23. The Perfect Storm

We conservatives have sat passively by for the last seventy years while the wave of socialism, started by the FDR administration, has continued to build strength and pour over us. We’ve worked, saved, raised our families and voted yet the storm, with a brief respite during the Reagan years, has grown larger and more devastating over time.

LBJ’s Great Society cemented the inevitable outcome we are just beginning to witness as those who contribute less and less demand more and more from those who produce wealth in this country. They have demanded, organized, lobbied, intimidated and voted themselves entitlements which are quickly bankrupting our nation.

We conservatives sat quietly and watched in the early 2000s as the Bush administration and the Republican controlled congress did nothing to ease the tide of socialism. Economic values and principles embraced by conservatives were ignored by Bush and the Congress and spending and waste continued unchecked.

Disillusioned by the Republican party and their candidate fielded for the 2008 election, some were desperate enough to vote democrat while many opted not to vote at all. Regardless, the approaching wave could not be stopped. Now all elements have come together to form the perfect storm, an economic Category 5 hurricane led by Obama, Pelosi, Reid, the democrat Congress and the main-stream media. Together they will destroy our economy, the dollar and every entitlement program devised over the last 70 years. It will wipe out and cleanse this country of socialism much as Katrina washed over New Orleans. In their attempt to banish the US of conservatism, they will instead be washing away all signs of their precious socialism.

Just as a hurricane needs fuel to continue its destructive journey, this storm needs money - your money - to feed itself. Hurricane Obama will seek out every dollar and confiscate it from those who have worked and saved. It will be taken “for the good of the collective.” When the monetary well is sucked dry, the Fed will print more and more worthless, inflated dollars of which will have no real value.

As much as Obama loves to crow about only raising taxes on a small portion of Americans, it is only the delusional who believe it. Taxes on sales, income and energy have already begun to rise in many states. "Sin" taxes are increasing at astronomical rates. Fees charged by government agencies have already, in many cases, doubled. A rise in corporate taxes means a subsequent rise in the products they produce. These are taxes and fees paid by not only the wealthy and the middle class but also by the poorest of those in our society.

What is soon to come? Inheritance taxes will be raised to levels only seen in socialist Sweden. There will be no point to even attempt to save for the next generation as the government will confiscate it. Already Obama’s administration is talking of confiscating retirement savings accounts, our IRAs, 401(k)s and annuities. These have been declared to be a “failure” by his administration and that they should be rolled into the Social Security system so that the government can "properly manage" them.

Profits made by wise individuals investing in energy, gold, silver and other commodities are already being targeted. Obama wants a big portion of their "ill-gotten gains" and is looking at windfall taxes exceeding 90%.

In the late 1990s, James Dale Davidson published his book, “The Sovereign Individual.” I suggest everyone read his book keeping in mind when he wrote it and then what is happening today. We as conservatives and moderates have no choice but to economically rise up against our government to preserve ourselves. Continued inaction will destroy any security we have amassed.

We must have a two-pronged approach to this storm. The first is to preserve our own wealth and the second is to cut off the monetary fuel that feeds this monster.

First, for those who still work, increase the deductions on your W-4 form, especially if you are someone who annually receives a refund. Stop lending money to the government interest free. If you are brave enough, stop paying taxes all together. After all, doing so didn't seem to hurt Tim Geithner's career.

Second, start paying for purchases in cash, preferably from smaller, locally-owned stores and markets. Negotiate “no sales tax” purchases. Not only do you save money by avoiding taxes, the vendor (regardless of his political persuasion) avoids paying state and federal income tax as he is unlikely to declare the income.

Third, if you are over 59 ½, consider rolling all money out of your IRA and 401(k) plans. Not only are you likely to pay higher taxes on what you withdraw in the future, but you risk having what is left in the account confiscated and rolled into the Social Security system. For those in Roth IRAs, do not count on the government keeping its promise for tax-free withdrawals. Ever since the inception of the Roth IRA I have been highly suspect that anyone, especially anyone of moderate means, would ever see the day in which the government didn’t renege on that tax promise. If you are under 59 ½, I would first stop contributing to your retirement account, take that money and begin buying gold and silver, as I talk about in the point below. If you currently have money in your retirement account, consider the penalties that will apply should you pull money out of your IRA. Reconsider your account and your contributions and what would happen if that money was suddenly gone and under the control of Nancy Pelosi.

Fourth, begin buying gold and silver. Not mining stocks or ETFs, but the physical metals. Be aware that FDR confiscated gold from those wise enough to hold it in the 1930s. Much of it needs to be in vaults in foreign countries such as Switzerland, Lichtenstein, or other countries with strict, private banking laws. Do not use banks with international branches such as UBS or Credit Suisse. Find smaller, independent banks. There is nothing illegal in transferring money to another country and buying gold for the bank to hold. Keep some silver on hand, either in the form of ingots, American Eagles or silver coins minted prior to 1965.

The Obama administration is already hoisting the red flag warning us about violence in the streets. But instead of the wild-eyed, rabid, right-wing conservatives they fear, it will be those people who were promised government money and will now be cut off that will be rioting. It will be their blood that is spilled in the streets as their only sources of income are cut off or the dollars they do receive are worthless.

The storm will pass, but the victims will be like those who stayed behind in New Orleans, believing the inevitable could never happen during Katrina. Open your eyes people, it is happening now and the financial devastation will be like nothing we have ever seen before.

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