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{ 13 comments… read them below or add one }

1 ray maughan January 9, 2010 at 2:34 pm

thank you for sharing and educating me ,and all the other folks who very much need to know this information. My wife and myself have been buying physical precious metals. I do have a question.There is much talk about a new reserve currency.If that is the case,is there anyway to know how soon this may occur?And if this is the case,what kind of impact would this have on the precious metals? thank You

2 Derrick January 9, 2010 at 6:40 pm


I’m just a bit confused on that Argentinian bit. It says that the state is taking control of the pensions but then later on it talks about the state getting mad at how the central bank isn’t doing what it wants with the pension funds. Who has the pension funds… the state or the central bank?

3 Derrick January 9, 2010 at 6:52 pm

Reading one of the articles you linked it says:
“Fernandez had ordered the central bank to use about $6.6bn in reserves to help cover $13bn in international debt falling due this year.”

As I understand it the government took $29 billion from the private pensions. Then it is ordering the central bank to uses $6.6 billion to pay a short term debt. So are these two events not related in the sense that they are coming from different money? I’m just confused because when you said, “On 8 January 2010 Kirchner has attempted to fire the chairman of the central bank because he has refused to use about $6.6B of THE FUNDS” I thought you meant the funds were coming from the $29 billion looted and not the bank’s reserves. Is this correct?

4 Mark Herpel January 10, 2010 at 5:50 pm

Great article Trace, amazing.


5 Steve January 11, 2010 at 9:39 am


I’ve read several articles regarding the ‘looting’ of tax deferred accounts. I’ve also read an account of a committee discussing how it might be done without sending folks to DC with pitchforks.

My wife and I have most of our savings IRAs and 401Ks. Is there any way to invest those funds which would protect them from forced investment in certs. of confiscation? Or is the only option to bite the bullet and pay the taxes and penalties?

I’ve been meticulously following your advice, as well as Sinclair’s, Casey’s and long list of hard money folks, and haven’t found a solution to this dilemma–save biting the bullet. Seriously, I read a lot and have found no solution to this problem; perhaps there is none. Our tax deferred acounts started out as a great way to save and avoid taxes, but has turned into our Achilles Heel.

Any suggestions, any at all, would make our day.

Thanks much for all you’ve done to help us poor schmuck savers out here.

Best, Steve

6 Trace Mayer, J.D. January 11, 2010 at 11:39 am

Thanks Mark.

Ray, no real idea on when a new reserve currency will come about. It will most likely be very bullish for the precious metals though.

Derrick, from what I understand it is funds on deposit at the central bank. I do understand your confusion about the conflation of the money and I am not exactly sure on the source of all the funds and where they are being spent. Like our Federal Reserve their system is not exactly all that transparent.

Steve, this is really a personal decision that should be made very carefully and deliberately. You will likely want to employ the use of a skilled accountant and attorney as there may be some exceptions that allow you to get money out without penalty. I have never trusted in the state sponsored retirement accounts and consequently have only contributed immaterial amounts to them so I am probably the wrong person to ask. I have voted NO CONFIDENCE for a long-time.

Ever heard the story about how monkeys are trapped? A gourd is placed inside a box and a hole is cut that is large enough for the monkey to fit its hand in but small enough that when a fist is made it cannot be moved through the hole. The boxes are then placed out in the jungle and the monkeys will grab the gourds and will not let go and allow themselves to be captured. The people just walk right up and put a bag over the monkeys. Go figure.

7 derryb January 11, 2010 at 4:45 pm

Trace, it is ironic that the timing of this proposal coincides with the lifting, in 2010, of the income limits for those that wish to “convert” a traditional IRA into a Roth IRA (with tax consequences on the amount converted). While there is a tax penalty to do the conversion (converted amounts count as income in the year converted, but a loophole allows the taxes owed to be split over the following two tax years) is it just possible that the Roth IRA will not be included in the “treasuries” proposal and that the 2010 lifting of income limits is not a coincidence? Could this lifting of income limits for IRA conversions be nothing more than an “escape” route for those in the know? Should we all convert to a Roth (if we can afford the tax bite) to avoid force treasury purchases?

8 Steve January 14, 2010 at 9:32 am


If derryb’s thesis is correct that ROTHs are a possible way out, albeit still taking the tax bite, then the strategy my wife and I have adopted could be more valid than we anticipated.

In 2008, when our junior miners were way in the crapper, we calculated how many FRNs we’d get back as tax returns. We then shifted that amount, in shares, to our ROTHs. While we didn’t get any FRNs back, we would up with solid juniors in the ROTHs with very little tax consequence. Since then, our ROTHs have quadrupled tax free.

Granted, there was/is the risk of the equities going to zero after having paid the taxes, but so far it’s worked out as we sell into strength. Unfortunately, we still wind up with the FRNs of various central banks.

If one really thinks the equities one holds are strong and will endure the market volatility, then the strategy would be to purchase equities in traditional IRAs, welcome extreme weakness and move them to ROTHs.

Of course, the strategy depends on whether or not the ROTHs will be immune to the gov’ment scheme. But even if they aren’t, at least you’ve avoided most of the capital gains taxes and are only left with the penalty if/when you bail out of the ROTHs.

I agree with you that the best place to be is in hard assets, outside of the gov’ment’s reach. If I could do it all over again, I would have avoided this trap in the first place. But what did I know? Nothing, until I educated myself with information such as you provide.

Thanks much, Trace, for providing this website. It’s folks like you and Schiff and Sinclair who will lead the way to a better future for this once great nation.

Best, Steve

9 Trace Mayer, J.D. January 14, 2010 at 9:44 am

Thanks Steve. It sounds like you did some very clever tax planning with the juniors in 2008. While I never welcome price weakness there are a lot of accounting situations where this can be particularly helpful for the tax situation. A few of my colleagues do this all the time with estate planning and I had a particularly aggressive friend who wondered what I though of using a Roth into a purchase option as part of a real estate deal to shift income there over a few years. Very interesting but I never did find out what he did.

There are situations where using the retirement accounts may be good but I do agree that most people have found themselves unwittingly in the trap. I have heard from many readers that if they had it to do over again that instead of contributing to retirement plans, etc. they would have just taken their extra money each month and gone down to the coin shop and bought a gold or silver coin. Interestingly, they would be in about the same spot financially without all the risk and headaches in terms of time! There is no free lunch. Glad you find the site helpful :)

10 Ron Holland January 25, 2010 at 5:33 am

Will Congress Loot The Private Retirement System?

Future Washington revenue needs and the growing treasury debt load may ultimately require government mandates directing retirement plans to purchase government bonds. In addition, Washington will likely force trillions of private plan benefits into new proposed “universal” government Guaranteed Retirement Annuities managed by the Social Security System.

This threat of stealth nationalization and confiscation and how it could happen is outlined in the 20 page special report, “Are You Ready for the Coming Obama Retirement Trap?”
Here is a URL link allowing you to read part of the special report.


11 Trace Mayer, J.D. January 25, 2010 at 11:08 am

Thanks Ron. That is a very plausible scenario you lay out in the article! Good to see someone talking about James Blanchard. Interestingly, a few weeks ago I was meeting with Anthem, James’s son, who has also introduced me to Tami. Small world!

12 Mary Erickson December 3, 2011 at 6:24 pm

Can you recommend a good tax attorney in the Seattle area who specializes in asset allocation. I’m disabled and currently have most of my nest-egg in an IRA. I’d like to put a large chunk of it into GoldMoney but want to be advised regarding tax considerations and an IRA before doing so. Or perhaps you give investment/tax advice, Trace? I’m feeling an urgency to get my money offshore. What do you think about offshore annuities as a vehicle to be safe vehicle from govt interference? I’d like to stay metals and GoldMoney looks good. Thank you! ~ Mary

13 Trace Mayer, J.D. December 4, 2011 at 8:26 pm

Hi Mary,

I do not give the investment/tax advice but recommend you seek professional assistance. I do not know a good attorney in the Seattle area. I have sent some readers to Bill Rounds, who coauthors HowToVanish with me, and he has been quite helpful in this area. From what I understand the fees for IRAs with GoldMoney are pretty high so I do not really like that vehicle. I like my bullion unencumbered as much as possible. Just some things to consider.

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