Lepard's Financial Advice

[The Good Doctor]

Yeah that is my problem. I have a 401k with two different cash preservation options.

One says this language:

seeks preservation of capital, liquidity, and, consistent with these objectives, the highest possible current income by investing in high-quality U.S. dollar-denominated money market securities issued in the U.S. and abroad. The fund is managed to maintain a constant share price of $1.00. An investment in this fund is not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

The other has this language:

This one was just added last week to our 401k btw.

seeks to maximize stability of capital, liquidity, and the highest available current income by investing in short term US Treasury obligations and repurchase agreements collateralized by such obligations. It is a money market trust that seeks to maintain a stable unit price of one dollar, although the price is not guaranteed or insured by the FDIC, any other government agency, or T. Rowe Price Trust Company. The Trust may be suitable for participants seeking the potential for maximum safety and the highest level of current income available through such investments.

So what the hell am I to do? They aren't guaranteed or insured by the FDIC etc. as listed above? My only other options are mutual funds, bonds, and my company's stock. Am I totally screwed? I can't sell it because I still work at the company as per T. Rowe Price when I called them on the phone Friday.

Larry says get out of all of those. So, now I have no idea what to do. Do I have any protection at all for my money then in my 401k?

There's no easy answers that's for sure.

While not perfect, consider moving it into a "cash preservation" option within your IRA or 401k. At least it's insured, until the FDIC's wheels come off anyway. Most 401k plans won't allow you to cash out an account.

 

[raiha]

Great advice Larry...had to give it to my sis as shes the one with the money...had..she may have to be foreclosed.
First redundancy and then foreclosure...hard when you have an autistic son.

In the meantime, my grandson and i went panning for gold yesterday. There's gold in them thar hills. We got some too. We got the fools gold, but also the real gold... a few flecks but you can't mistake it.And there are semi precious crystals, green jasper,amethyst....quartz crystal. Its a magical valley we are in. This whole town was built on gold mining. Old mine shafts around.
But the prospecting licenses cost so much even the multinational company Amax (one of the filthy five when it comes to clean-up time) couldn't afford to go in.

 

[gilliganscorner]

I disagree with this statement. If the dollar is worthless, what good is exchanging metals for dollars? Better to have the means to grow food. Everyone will be willing to trade for food when food is scarce. You can't eat metals.

The means to grow food includes: (a) land with good soil, sufficient rain and/or ability to irrigate; (b) seeds that will produce plants with fertile seed; (c) knowledge and skill to produce your crops without the aid of agricultural chemicals; and (d) the right tools to work the land.

This is a common question that I get defending the gold standard to fiat.

In any Financial Armageddon, people argue that gold and silver are useless as money. ANY money is worthless if no one will accept in a trade.

Here's what you need to consider. What happens BEFORE the collapse? Is inflation running at 20% year (some say we are now)? What if it were 20% month? 100% per month? 1000% per month? Zimbabwe? What if the value of your dollar is hanging in the sky like bricks don't? The price of gold and silver is skyrocketing? This would condition people's psyches to re-awaken the fact that gold and silver is REAL money.

THAT is why it matters.

The point is before that time, none of us will accept cash, or if we DO accept it, we would never be so insane to keep it in our pockets/wallets/purses for long. We would seek to spend it as fast as we could. The person who accepted from you would do the same. And so on, and so on. Think of it like a deadly game of "hot potato".

However, those who trade with gold and silver wouldn't have to worry about a printing press (i.e. the State/Banking cartel) devaluing their Federal Reserve Points (hey, calling a point is just as good as calling it a "dollar" - an arbitrary that has no objective measurement).

My personal advice is to begin to acquire gold and silver AND build your networks of people that are willing to trade their goods and services with each other. You need to build a "counter-economy" (agorist) outside of the "red market" we all are enslaved to.

Hell, even if the State does not collapse you could still run your networks with each other trading outside of the taxation/inflation system we currently are matrixed into. Imagine where you could work part-time (you would still need Federal Reserve Points to pay off taxes and things not available in the agorist network, until new members boarded offering what was missing) where you did not have 40-50% of your income stolen by taxation and 10-20% stolen by inflation. It is STILL a worthwhile endeavor.

My debased two cents.

 

[itshappening]

the Gold price is manipulated by central banks who hold large reserves and can affect the market, we need to look at other tangible assets like platinum, palladium, ore and such things that they cannot (or do not) manipulate. think about it

governments can also confiscate gold as a US president once did

 

[gilliganscorner]

the Gold price is manipulated by central banks who hold large reserves and can affect the market, we need to look at other tangible assets like platinum, palladium, ore and such things that they cannot (or do not) manipulate. think about it

governments can also confiscate gold as a US president once did

If it is being manipulated downward that means the central banks are selling. It isn't the mines that are adding to the supply. Go to gata.org and look at their research and come to your own conclusions.

If you think it is being manipulated downward, shouldn't you be buying it?

 

[itshappening]

If it is being manipulated downward that means the central banks are selling. It isn't the mines that are adding to the supply. Go to gata.org and look at their research and come to your own conclusions.

If you think it is being manipulated downward, shouldn't you be buying it?

people should buy it YES but they should also buy stuff the banks dont buy because they do hoard a lot of gold and sell to each to other, they 'fix' the spot price daily in London, this is FACT. of course, it would little matter in an armeggedon and over the long term they will fail but in the medium term your investment could be subjected to evil bankers degrading it

 

[RonPaulCentral]

governments can also confiscate gold as a US president once did

It had limited success the first time around. If they tried to pull that nonsense again I doubt many would participate. This time offshore storage is also a much bigger factor.

I also think that is the govt tries a gun grab here very few will participate. I know a number of people (retired police & military included) that say (and I totally believe them as I honestly feel the same way) that if they come for them that the only way they will get them is after one hell of a firefight and them stepping over them to take the cache.

 

[freelance]

There's no easy answers that's for sure.

While not perfect, consider moving it into a "cash preservation" option within your IRA or 401k. At least it's insured, until the FDIC's wheels come off anyway. Most 401k plans won't allow you to cash out an account.

Do they still allow the "loan" option? Would that work?

 

[llepard]

Thanks Lepard.

One question: How do you feel about silver, as opposed to gold, for someone with limited capital for PMs. The main reason I've been buying silver lately is because the premiums for smaller quantities of gold is enormous. I've been getting good deals on silver lately.

Thanks for the great advice.

I like silver a lot. It is poor man's gold. It is more volatile than gold. It gets consumed and so there is an "industrial demand" component to it.

It is big and bulky. $200k of silver is about the size of a small car. Tough to put in a suitcase and skeddadle with. $200k of gold can be put in a woman's purse.

It is harder to find today. Most coin dealers cannot get it. So, it may have more upside than gold.

Gold is more universally recognized, but silver is a close second.

 

[manny229]

I like silver a lot. It is poor man's gold. It is more volatile than gold. It gets consumed and so there is an "industrial demand" component to it.

It is big and bulky. $200k of silver is about the size of a small car. Tough to put in a suitcase and skeddadle with. $200k of gold can be put in a woman's purse.

It is harder to find today. Most coin dealers cannot get it. So, it may have more upside than gold.

Gold is more universally recognized, but silver is a close second.

Hello Llepard;

What do you think about owning GLD or SLV, in addition to the physical metals?

Thanks

 

[llepard]

Hello Llepard;

What do you think about owning GLD or SLV, in addition to the physical metals?

Thanks

A poor second choice. CEF is better.

The issue is, do they have the gold and silver they claim?

Do they own derivatives? Is there counterparty risk?

I do not know the answer. But if the financial system fails owning these will not protect you in the same way that having the physical metal in your possession will. What good will it be to make a gain on GLD and SLV if you cannot get your money out of your broker because they are bankrupt.?

That is the issue.

 

[Anti Federalist]

The Good Doctor asked:

So what the hell am I to do? They aren't guaranteed or insured by the FDIC etc. as listed above? My only other options are mutual funds, bonds, and my company's stock. Am I totally screwed? I can't sell it because I still work at the company as per T. Rowe Price when I called them on the phone Friday.

Larry says get out of all of those. So, now I have no idea what to do. Do I have any protection at all for my money then in my 401k?

Neither one of those options look all that great, in my opinion.

I held a meeting for the crew of my ship as all this was unfolding. Within our company's 401k plan there is an option to sell off all the mutuals, individual and/or company shares and move the proceeds into an insured "cash preservation" account, basically a (relatively) high interest money market account.

It sounds like that option is not open to you.

I wish I could give you more information, unlike Larry, I am certainly no financial manager or advisor, and in no position to give financial advice based on being in the "business". I'm just an ol' Merchant Marine captain. But I had 14 men freaking out about this, and the level of knowledge was abysmal amongst them, so I figured I better get smart, quick and try to help out as best I could. I'm not even in the 401k plan at my work, since I saw this coming years ago, and for the piddly little 6% of matching, it wasn't worth the grief and went in other directions with my money.

So, to answer your question, look again for that insured cash option within the plan and move into that if you can. If not, consider rolling some or all of it into a self directed IRA, and then move into an insured position.

 

[MoneyWhereMyMouthIs2]

5. I would not pay off any debt if I could be sure to service it. I will repay it with worthless future dollars.

^^^^^^^^^^^^^^ Yeah, that. I'm glad to see that on the list because it runs counter to what almost everyone says. Most say "pay off debt now." I say pay it off later after massive inflation. Of course, things can get so bad, that's not an option.

 

[LibertyEagle]

Llepard,

Jim Sinclair has been recommending for a long time, to get your stocks, etc. out of "street name" at your broker and get them registered with the transfer agent, or even better, get the stock certificate.

What are your thoughts on this?

 

[llepard]

Llepard,

Jim Sinclair has been recommending for a long time, to get your stocks, etc. out of "street name" at your broker and get them registered with the transfer agent, or even better, get the stock certificate.

What are your thoughts on this?

Agree strongly. It will be an issue.

However, I basically do not own any stocks (except a few small gold miners).

Brokers can and will fail. If you have stocks you do not want to sell I would get the certificates.

 

[Ozwest]

llepard,

To my left, on my wall, pride of place I have a copy of your beautifully written " An Open Letter to the American People."

I was sent the Newspaper.

Aussies come to my house. You have made a difference.

Respect.

 

[Bradley in DC]

If you have an account overseas that is more than $10k you must report it or you are committing a felony.

Thanks. I would add that the $10k figure is for one account or an aggregate total of different accounts.

 

[tod evans]

llepard,
i don`t own "liquid" assets such as stocks-n-bonds, what i do own is a 100% paid for building, the property it sits on and the business they house.
my business is custom woodworking and my cliental to date have been fairly well to do.....i fully realize that the purse strings are tightening among that crowd but my question for you is if you think i am wise to retain ownership of my property and equipment?
thanks, tod

 

[Ozwest]

I'm not a financial genius, but 14 months ago I withdrew all my Superannuation, and 90 percent of my shares.

I am pissed off about leaving 10 percent in the stock market.

It is slaughtering my PROFIT margin.

Twenty percent of my assets are going into gold.

I never make purchases oner 10,000.

Life is a circle.

 

[Bossobass]

Dang. It is SO FREAKING HARD to bite the bullet and cash out my retirement accounts (taking a heavy hit on the penalties and taxes) but I am worried that I need to do this now or lose it all.

STUPID FREAKING FEDERAL RESERVE SCREWING UP MY LIFE! Argh.

Pirates, the lot of them.

You might consider that the tax burden in this country will no doubt skyrocket along with the unprecedented increase in deficit spending.

Though it may seem a heavy hit now, it will most probably be a much heavier hit later.

There are 499 pages to this Bailout Bill. I haven't read and digested all of it yet, but terms like 'Acceleration of Effective Date' for 'Zero Reserve Requirement' and 'IRS' raise my flags.

All things considered, I agree with Lepard's thoughts. Cash, silver, gold, food...IN HAND beats zero on paper.

Only a complete lunatic would trust any of these financial institutions or Congress after the fiasco we've witnessed over the last 8 years.

Just my wild guess opinion, FWIW.

Bosso